Lenovo shrugs off decline of PC and nearly doubles its earnings

City A.M. Reporter
LENOVO’S bold acquisitions in its flagship PC business, a foray into mobile gadgets, and a relatively light debt load are setting it apart from PC rivals as industry shipments take their steepest fall in decades.

Lenovo, a sliver away from unseating Hewlett-Packard as the world’s top PC maker by shipments, yesterday posted an estimate-beating 90 per cent rise in quarterly profit, its fastest in seven quarters.

“They have been aggressive in acquiring several distributors in different regions such as Brazil, Europe and Japan over the past few years, so that basically gave them better distribution, as well as gains in market share,” said Warren Lau, an analyst at Maybank Kim Eng Securities in Hong Kong.

The Chinese PC maker posted net profit of $126.9m (£84.2m) in the quarter ended in March, up from $66.8m a year earlier.

That beat expectations of a $110m net profit and was the fastest pace since the first quarter of the 2011-12 fiscal year, when growth doubled.

Research firm IDC said global PC shipments fell 13.9 per cent year-on-year in the first quarter of 2013, the biggest decline since it began tracking the market on a quarterly basis in 1994, as consumers switched to mobile computing.