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Lenovo back in profit as IT demand rises

0 CommentsPrint E-mail Shanghai Daily, May 28, 2010
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Lenovo Group Ltd, which went from loss to profit in the fourth fiscal quarter ended March 31, benefited from booming demand in China and the recovering economy which fueled IT demand in the global marketplace, the world's No. 4 PC maker said yesterday.

Lenovo was the fastest growing of the top five PC manufacturers for the second consecutive quarter and was profitable in each of the last three quarters, the Beijing-based firm said.

Lenovo reported a net profit of US$12.78 million in its fiscal fourth quarter, reversing a US$263 million loss a year ago. Revenue jumped 56 percent year on year to hit US$4.3 billion.

During the fourth quarter, Lenovo's worldwide PC shipments increased 59 percent year on year, compared with an overall industry growth rate of approximately 27 percent.

"While we have achieved much in the past 12 months, there are both significant challenges and tremendous opportunities ahead of us, and we believe we have the right pieces in place to lead our business as we continue to build our base in China and expand globally," Liu Chuanzhi, Lenovo's chairman, said.

Lenovo China posted US$2 billion in consolidated sales in the quarter, a 67 percent increase year on year, accounting for 45.3 percent of Lenovo's worldwide sales.

Recovering IT demand across the world also fueled the growth of Lenovo.

Global IT spending is expected to rise 5.3 percent annually to US$3.4 trillion in 2010, according to Gartner Inc, a United States-based consulting firm.

But Lenovo's profit margin declined to 10.8 percent from 12.1 percent in the past year, facing competition from rivals such as Hewlett-Packard and Acer.

In the full fiscal year of 2009 ended on March 31, Lenovo's revenue increase 11.4 percent year on year to US$16.6 billion. Lenovo's PC shipments grew 28.1 percent compared with the previous year.

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