Lenovo quarterly profit rebounds on strong sales

Lenovo quarterly profit rebounds on strong sales

Beijing: Lenovo Group, the world’s fourth-largest personal computer maker, reported its second straight quarterly profit on Thursday as a 33% rise in sales drove its recovery from the global downturn.

Profit for the three months ending 31 December was $80 million, or 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 to $4.8 billion.

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

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

“We have achieved our highest-ever global market share for the third straight quarter and notably increased profitability," CEO Yang Yuanqing said in a statement. “These achievements demonstrated the effectiveness of the strategies we mapped out at the beginning of the year."

Yang said Lenovo plans to aggressively expand in mobile Internet after launching a netbook and a 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.

“In the future, while we continue to expand our PC business, we also want to attack the mobile Internet category to drive growth and capitalize (on) our innovation efforts," Yang said.

Quarterly sales in Lenovo’s home China market soared 45% from a year earlier to $2.3 billion, accounting for 47% of the company’s worldwide total.

The company said its China market share rose 2.8 percentage points to 33.5 % 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% from a year earlier to $1.7 billion, the company said. In India and other emerging markets, sales rose 52% to $857 million.