PC maker Lenovo says quarterly profit rebounds to $80 million on 33 percent rise in sales

more images

more images

more images

more images

Lenovo quarterly profit rebounds on strong sales

BEIJING — Lenovo Group, the fourth-largest personal computer maker, reported its second straight quarterly profit Thursday as strong sales in China drove its recovery from an industrywide global downturn.

Profit for the three months ending Dec. 31 was $80 million, or 0.86 cents per share, compared with a $97 million loss for the same period of 2008, said Lenovo, based in Beijing and in Morrisville, North Carolina. Global sales rose 33 percent to $4.8 billion, driven by a 45 percent increase in China, where Lenovo is the market leader.

Lenovo was hit hard by the global economic crisis, which prompted its core corporate customers to slash purchases. The company suffered three losing quarters before rebounding to earn $53 million in the three months ending Sept. 30.

The company, which acquired IBM Corp.’s PC unit in 2005, said its global market share expanded to 9 percent, its highest to date.

“Our growth was driven by gains in almost all regions of the world, particularly China and other emerging markets,” CEO Yang Yuanqing said in a conference call.

Still, Yang cautioned that corporate spending was not expected to revive until at least the second half of 2010, which could weigh on revenues. He said Lenovo also faces pressure from rising component costs.

Yang said Lenovo plans to expand aggressively in mobile Internet after launching a netbook and a Web-enabled smart phone last month. The company paid $200 million in November to buy back mobile phone assets that it sold earlier to focus on PCs.

“We believe Lenovo’s mobile Internet products have high potential,” Yang said. “We will continue to invest heavily in emerging markets and in consumer businesses — especially mobile Internet — to achieve sustainable growth.”

Lenovo said its quarterly sales in China rose to $2.3 billion, accounting for 47 percent of the worldwide total.

The company said its China market share rose 2.8 percentage points to 33.5 percent despite competition from industry leaders Dell Inc. and Hewlett-Packard Co., which are trying to expand sales to both prosperous cities and the poorer countryside.

In mature markets such as the United States and Western Europe, sales rose 13 percent from a year earlier to $1.7 billion, the company said. In India and other emerging markets, sales rose 52 percent to $857 million.

On the Net:

Lenovo Group: www.lenovo.com