Lenovo Group Ltd. (992), the world’s second-biggest maker of personal computers, posted a 30 percent increase in first-quarter profit as it expanded market share globally to almost pull even with leader Hewlett-Packard Co. (HPQ)
Net income climbed to $141.4 million in the three months ended June 30, from $108.8 million a year earlier, Lenovo said in a statement today. That beat the $133.5 million average of eight analysts’ estimates compiled by Bloomberg.
Lenovo increased shipments of computers including Thinkpad laptops by almost 15 percent in the three months ended June, even as industry shipments fell 0.1 percent, researcher Gartner Inc. said last month. The PC maker expanded its global market share by two percentage points to 14.7 percent, almost matching Hewlett-Packard Co.’s 14.9 percent share.
“Lenovo benefits from their position in the China market,” Christine Wang, a Taipei-based analyst at Daiwa Capital Markets, said before the earnings. “Their penetration in China’s countryside and lower-tier cities is higher than any of the others. In lower-tier cities the PC growth rate is still double-digit, which is why Lenovo is able to beat the industry average.”
Revenue rose 35 percent to $8 billion, compared with an estimate for $8.12 billion, the average of 13 analysts in the Bloomberg survey.
The company, with headquarters in Beijing and Morrisville, North Carolina, plans to become the world’s biggest PC maker, Chief Executive Officer Yang Yuanqing said in October. He helped boost sales by acquiring control of Medion AG (MDN), an Essen, Germany-based computer maker, and the PC unit of Tokyo-based NEC Corp. (6701) last year.
Yang is also stepping up development of smartphones, tablets and Internet-ready televisions to widen the Chinese company’s product line for consumers, following Apple Inc. and Samsung Electronics Co.
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