Lenovo Group Ltd, China's top personal computer (PC) maker, has
posted its best quarterly results since purchasing IBM's PC arm in
2005.
The world's third-largest PC manufacturer earned US$57.7 million
in the three months ending on December 31, up 23.2 percent from
US$46.8 million the same period a year earlier.
The result narrowly beats market forecasts, which estimated the
group would have US$56 million in net income during the period.
During the third fiscal quarter, the company recorded higher
revenues of US$4 billion compared to the same period the year
previous. Its profits for the nine months ending on December 31,
however, dropped by 27 percent from US$138 million in 2005 to
US$100 million last year.
Lenovo, one of a handful of Chinese companies trying to craft a
global brand, earned a pre-tax income of US$64 million. Its
worldwide PC shipments grew about 8 percent, ahead of the industry
average of 7 percent, the company said yesterday.
The PC giant has been aggressively seeking ways to curb
expenditure, including cutting staff and combining sales teams, but
investors will watch to see how the group overhauls itself in 2007
as overseas peers add spice to the competition.
Lenovo held its position as the top PC maker in Asia-Pacific,
excluding Japan, with a 21.6 percent share in the fourth quarter
last year, according to the IT market consulting firm IDC. For
2006, the company had 19.9 percent of the market, followed by
Hewlet-Packard with 12.6 percent and Dell with 8.8 percent.
"Continued high growth in our China business enabled Lenovo to
hold global market share," said Yang Yuanqing, Lenovo's chairman.
"All of our geographic regions except the Americas reported
profitability this quarter in a very competitive market."
The US group lagged behind its two global rivals with a 7.3
percent market share, compared with Hewlet-Packard's more than 18
percent and Dell's 14.7 percent.
"Hewlet-Packard is by far the largest PC maker in terms of
market volume," IDC said in a report. "Microsoft's new Vista
operating system fuels the already fierce competition, so we will
hold a watch-and-see attitude with all the ambitious PC
makers."
William Amelio, Lenovo's president and chief executive officer,
said in March last year Lenovo would cut about 1,000 jobs and move
offices at a cost of US$100 million after completing the US$1.25
billion acquisition of IBM's PC business in May 2005.
"Transformation takes time, but we are confident that we have
the right plan in place to achieve our goals and deliver enhanced
shareholder returns," said Yang in a statement.
(China Daily February 2, 2007)