Lenovo Group Ltd. (992) boosted second- quarter profit 13 percent as it expanded market share to overtake Hewlett-Packard Co. (HPQ) in personal-computer shipments.
Net income climbed to $162 million in the three months ended Sept. 30 from $143.9 million a year earlier, Lenovo said in a statement today. That beat the $158.4 million average of eight analyst estimates compiled by Bloomberg.
Chief Executive Officer Yang Yuanqing built the Chinese company into the world’s largest PC maker last quarter as it accounted for 15.7 percent of global PC shipments, overtaking Hewlett-Packard’s 15.5 percent, market-research firm Gartner Inc. said last month. Yang now wants to extend that dominance to smartphones, and the unit making mobile devices almost tripled sales through the first six months of this year.
“We’re positive on their development in smartphones,” Christine Wang, a Taipei-based analyst at Daiwa Capital Markets, said by phone today. “Lenovo will outperform the PC industry, but it’s still slowing down. So if the company can deliver performance on the smartphone side, that is pretty good.”
Revenue at Lenovo, whose headquarters are in Beijing and Morrisville, North Carolina, rose 11 percent to $8.67 billion from $7.79 billion. That compared with the $8.65 billion average of 13 analyst estimates compiled by Bloomberg.
Computer Acquisitions
Lenovo’s shares pared declines in Hong Kong trading and closed down 2.7 percent at HK$6.58, after falling as much as 3.9 percent before the announcement. The stock has climbed 27 percent this year, surpassing the 17 percent gain for the city’s benchmark Hang Seng Index.
Lenovo, which bought the PC division of International Business Machines Corp. (IBM) in 2005, used acquisitions to help boost sales in the past year. The company bought control of Medion AG (MDN), an Essen, Germany-based computer maker, and the PC unit of Tokyo-based NEC Corp. (6701) in 2011.
With the release of Microsoft Corp. (MSFT)’s new Windows 8 software, Lenovo sees an increase in global PC demand, even with “softness” in the world economy, Yang said on a conference call today.
The PC maker is also stepping up development of smartphones, tablets and Internet-ready TVs to widen its product line for consumers to challenge Apple Inc. and Samsung Electronics Co.
Source: Bloomberg Businessweek
