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Lenovo Posts Q2

BEIJING — Lenovo Group today reported results for its second fiscal quarter ended September 30, 2010, and for the fourth quarter in a row, Lenovo delivered solid execution, helping the Company grow faster than any of the top four PC manufacturers. With its continued focus on balanced growth across all markets, product lines and customer segments, Lenovo recorded its highest-ever worldwide quarterly market share of 10.4 percent, and gained share points in China, mature markets and emerging markets alike. For the sixth quarter in a row, the Company grew faster than the industry.

During the second fiscal quarter, Lenovo’s worldwide PC shipments grew 33 percent year-over-year, compared to an industry growth rate worldwide of approximately 9.7 percent.

Consolidated sales for the second fiscal quarter increased 41 percent year-over-year to US$5.8 billion. The Company’s gross profit for the second quarter increased 37 percent year-over-year to US$593 million, with gross margin at 10.3 percent.

Operating profit for the second fiscal quarter was US$108 million (excluding a US$1 million restructuring cost), more than double the amount from the second quarter last year. Lenovo reported a second quarter pre-tax income of US$102 million, an increase of 57% year-over-year. Profit attributable to equity holders for the second fiscal quarter was US$77 million, a 45 percent increase year-over-year.

Basic earnings per share for the second fiscal quarter was 0.81 US cents, or 5.45 HK cents. Net cash reserves as of September 30, 2010, totaled US$2.3 billion. The Board of Directors declared an interim dividend of 2.6 HK cents per share.

“Lenovo continued to deliver excellent results, highlighting the balance in our business. In line with our “Protect-Attack” strategy, the China, mature markets and emerging markets have all been growing steadily. There are three aspects that the Board is particularly satisfied with. First: management's visionary decision to increase investment in R&D and brand building. Second: the leadership team, who are working effectively and efficiently, with good rapport. Third: Lenovo's culture of meeting commitments and taking ownership is being embraced and fully adopted by our employees worldwide,” said Lenovo Chairman Liu Chuanzhi. “When a company has a solid leadership team, the right strategy, and a strong corporate culture, this company will be sustainable and enduring. Lenovo continues moving in this direction.”

“With the right strategy and strong execution, we not only maintained strong growth and good profitability in China, our business in emerging markets also became our new growth engine and our business in mature markets became our profit engine. This led to balanced growth of the company across the board.” said Yang Yuanqing, CEO, Lenovo. “Looking forward, we will continue to increase our competitiveness in innovation, business models, and branding. With the effective execution of our strategy, we are confident that we can continue to outgrow the market.”

{complink 9284|Lenovo Group Ltd.}

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