Lenovo earns $54.9 million net profits in Q1

Lenovo Group today reported results for its first fiscal quarter ended June 30, 2010, and for the third quarter in a row, Lenovo was the fastest growing of the top five PC manufacturers. During the first quarter, Lenovo achieved for the first-time ever, double-digit market share worldwide, and recorded its lowest-ever quarterly expense-to-revenue ratio.

It was also the fifth consecutive quarter that Lenovo outgrew the industry. During the first fiscal quarter, Lenovo’s worldwide PC shipments increased 48.1 percent year-over-year, compared to the industry’s growth rate of approximately 20.9 percent worldwide for the same period.

Consolidated sales for the first fiscal quarter increased 49.6 percent year-over-year to US$5.1 billion. The Company’s gross profit for the quarter increased 38.6 percent year-over-year to US$523 million, with gross margin at 10.2 percent.

 

Operating profit for the first fiscal quarter was US$82 million (excluding a US$1 million restructuring cost), a five times improvement over the same period last year. Lenovo reported a first quarter pre-tax income of US$75 million. Profit attributable to equity holders for the quarter was US$55 million, a US$71 million improvement year-over-year. Basic earnings per share for the first fiscal quarter was 0.57 US cent, or 4.43 HK cents. Net cash reserves as of June 30, 2010 totaled US$2.2 billion.

 

"Following our outstanding achievement of the past financial year, Lenovo achieved an excellent first fiscal quarter based upon our original projections. Our performance was strong globally, Lenovo has a clear strategy when and where to focus on gaining share, and when and where to focus on maximizing profit, and we executed that strategy well," said Lenovo Chairman Liu Chuanzhi. "Lenovo's management team continues to focus on executing our strategy, and despite the ongoing challenges and uncertainties of the world's economy, I firmly believe that Lenovo's future is bright."