Lenovo Says 1H Profit Nearly Doubled
SHANGHAI (AP) — Lenovo Group, one of the world's leading personal computer manufacturers, reported Wednesday that its profit in the first half of the year nearly doubled on strong emerging market sales.
Net profit for the half-year period was $252 million, or 2.52 U.S. cents per share, up 92 percent from $131 million a year earlier.
The results built on Lenovo's expansion into mobile Internet, competing with Apple Inc. and other foreign rivals, and in developed markets with an acquisition this year in Germany and a joint venture in Japan.
Strong growth in "emerging cities" inside China, which accounts for nearly 44 percent of Lenovo's sales, helped drive the company's strong performance. Sales in emerging markets excluding China — India, Russia, Southeast Asia and Latin America — grew 41.5 percent from a year earlier, or over three times faster than the overall market, it said.
Lenovo said flooding in Thailand was likely to impact the global supply of hard disk drives and it will "monitor the situation closely and take necessary actions to mitigate the potential impact."
Lenovo, which acquired IBM Corp.'s PC unit in 2005, overtook Taiwan's Acer Group this year to become the third-largest PC vendor, according to International Data Corp.
The company said improving commercial demand helped make up for weakness in consumer purchases.
After spending the past two years focusing on expanding sales, Lenovo has adjusted its strategy to give equal emphasis to profits.
A "protect and attack" strategy of sustaining its leading market position in China while expanding into other regions with diverse products helped fuel "balanced, strong growth in all geographic segments and products and customer segments," it said.
Lenovo said it held a worldwide PC market share of 13.5 percent in its second fiscal quarter, July-September, a trend that helped it regain a ranking among the Fortune Global 500 companies for the first time since 2008.
Lenovo entered wireless Internet last year and has launched smartphones and Web-linked tablet computers in competition with Apple, South Korea's Samsung Electronics Corp. and Taiwan's HTC Corp.