The Lenovo Group Ltd, China's biggest personal-computer maker, reported fiscal first-quarter profit rose 65 percent on increased sales to businesses in Europe.
Net income climbed to US$110.5 million, or 1.15 cents a share, in the three months ended June 30, from US$66.8 million, or 0.74 cent, a year earlier, the North Carolina-based company said in a statement yesterday. Profit matched the US$110-million median of six analyst estimates in a Bloomberg News survey.
Lenovo gained market share in Europe through distributors, including Ingram Micro Inc and Tech Data Corp, helping to compensate for a decline in sales in the United States.
The maker of Thinkpad notebooks, which derives most of its revenue from corporate clients, is adding lower-priced products amid slowing economic growth.
"In the PC business, it is important for companies to have good sales channels, and Lenovo has focused on this and got good results in Europe," Wang Wangli, who rates the computer maker's shares "overweight" at HSBC Holdings Plc, said before the announcement.
Revenue in Europe, the Middle East and Africa increased 20 percent to US$903.8 million, according to the statement. Lenovo's PC shipments in the EMEA region rose 26 percent in the three months ended June, beating the 24.5-percent growth in the overall market, as the company increased sales to business customers, research company IDC said.
Sales from continuing operations rose to US$4.21 billion from US$3.81 billion, compared with the US$4.13-billion median estimate.
Lenovo said this week it will offer low-cost notebooks from October, after Acer Inc began selling the products in June.
(Shanghai Daily August 8, 2008)
