Lenovo Last Fiscal Year Net Profit Up 73%; Outpaces Industry Growth
First Published Wednesday, 23rd May 2012 07:43 am - © 2012 Dow Jones
-- Lenovo's net profit for the last fiscal year rose 73% as its PC sales outpaced industrywide sales
-- Lenovo beats rival Dell in profit growth as the Chinese PC maker focuses increasingly on fast-growing emerging markets
-- Lenovo says it expects growth momentum to continue
(Recasts 1st paragraph, adds background in 2nd and 5th paragraphs, company's statement in the 4th and 7th paragraphs.)
By Paul Mozur
Of Dow Jones NEWSWIRES
BEIJING -(Dow Jones)- Lenovo Group Ltd. (0992.HK) said Wednesday its net profit for its last fiscal year rose 73% as its personal computer sales outpaced industrywide sales, and the company is confident the growth momentum will continue as it is aggressively pursuing new opportunities in mobile devices.
Lenovo is China's largest PC maker by shipments and by far the fastest growing of the world's top PC makers, with its profitability outpacing rivals Dell Inc. (DELL) and Hewlett-Packard Co. (HPQ) as the Chinese firm has targeted fast-growing emerging markets while Dell and HP have revamped their businesses to move away from low-margin PC production. Meanwhile, the global PC industry has taken a hit in recent years as users have increasingly traded their computers for smartphones and tablets.
Lenovo's net profit for the 12 months ended March 31 was US$472.99 million, up from US$273.2 million a year earlier. Revenue rose 37% to US$29.6 billion from US$21.6 billion.
"Lenovo's global PC shipments grew by 35% yearâ€overâ€year, outperforming the industry by 10 times," and the company's global market share increased by three percentage points, Chief Executive Yang Yuanqing said in a statement on the company's results.
The strong performance by Lenovo, which bought International Business Machines Corp.'s personal computer business in 2005, comes after Dell said Tuesday its profit fell 33% from a year earlier in the fiscal quarter ended May 4, missing forecasts. Hewlett-Packard Co. is also hurting, with analysts expecting the company to outline plans to lay off as many as 30,000 workers when it reports earnings later Wednesday.
In the first quarter of 2012, Lenovo held a 13.1% market share globally, compared to HP's 17.7% share and Dell's 11.4%, according to IDC, making it the world's second-largest PC maker.
Lenovo said that in its fiscal fourth quarter, PC shipments in China rose 22.7% from a year earlier, while those in other emerging markets grew 50%, with a strong showing in India and Russia. PC shipments in mature markets increased 81%.
The company declared a final dividend of HK$0.10 for its last fiscal year, compared with HK$0.05 a year earlier.
-By Paul Mozur, Dow Jones Newswires; 86 10 8400 7702; email@example.com