Lenovo reports 30% higher annual profit
22 May 2014
Lenovo, the Chinese maker of computers and smartphones, reported that its net profit was up nearly 30 per cent in the fiscal year that ended in March, with robust smartphone sales boosting growth the country, Reuters reported.
Net profit stood at $817.2 million, as it shot 29 per cent, from $631.6 million the previous fiscal year, according to the company's statement. Revenue increased 14.3 per cent to $38.7 billion.
''Lenovo's smartphone unit shipments achieved a record-high level of over 50 million for the fiscal year, growing by 72 per cent year-on-year, driven by the strong growth in China and emerging markets outside of China,'' the company said in the statement.
Shares of Lenovo were up 3.4 per cent at close in Hong Kong.
Sales in China - which continues to be the company's largest market, making up almost two-fifths of revenue - rose just 1.3 per cent to $14.7 billion during the fiscal year.
This was offset by increases of 27.1 per cent for sales in Europe, the Middle East and Africa, and 31.1 per cent in the Americas. The mobile internet and digital home business unit, of which the smartphone business forms a part, saw an 86.1 per cent increase in sales to $5.7 billion.
''Stronger growth in ex-China markets should be a key driver of sales'' in the smartphone segment, said Steven Tseng, a Daiwa Capital Markets analyst, in a note on Monday, before Lenovo's earnings report.
Meanwhile, according to a separate Retuers report, Lenovo, which competes with Apple in the US, agreed to the acquisition of IBM Corp's low-end server business and Google Inc's Motorola Mobility smartphone unit in two separate deals worth a total of $5.2 billion in January.
Chief executive Yang Yuanqing said he hoped those deals, requiring US approval, would not be affected by the rift between Beijing and Washington over the US indictment of five Chinese military officers for cyber-theft against US companies.
Reuters quoted Yang as saying in a telephone interview that he did not think the cyber-theft case would impact Lenovo's business.
He added for a long time, the company had operated not just in China but also in the US and other global markets. He said, Lenovo had always been a transparent company, a trusted company, and had never had any issues with the government.
The bulk of Lenovo's revenue growth in the 12 months to end March, came from overseas markets, with revenues in Europe, the Middle East and Africa (EMEA) and the Americas each increasing roughly 30 per cent, to account for 83 per cent of total revenue growth.
