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Lenovo Q1 Profit Soars
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Lenovo, China's largest computer manufacturer, recorded a net profit of $67 million in the first fiscal quarter, 12 times higher than the same period last year, due to robust global computer sales.


The company posted revenue of $3.9 billion, representing a year-on-year increase of 13 percent. The rise was mainly attributed to growing demand in the global personal computer (PC) market.


During the period, Lenovo's worldwide PC shipments grew 22 percent, exceeding the industry average of 13 percent.


The company's gross profit margin rose 14.9 percent, compared to 14.3 percent last year, while pre-tax income increased 258 percent to $123 million. Net cash reserves at the end of the first half-year period were $1.3 billion.


Lenovo is the world's third-largest computer firm in terms of sales. Its global market share in the quarter increased to 8.3 percent, up 0.7 percent.


"In the past two years, through the formulation of the right strategy and effective execution, Lenovo is showing signs of growth," said Lenovo Chairman Yang Yuanqing.


The company reported pre-tax income of $78 million.


For the mainland market, Lenovo posted 14 percent growth in revenue to $1.5 billion. The company currently holds 35.5 percent market share in the mainland's PC market.


The company reported a moderate increase in mobile phone sales volume as well, though sales revenue slid from $173 million to $113 million, due to furious competition in the mainland market.


Lenovo is currently the fourth-largest mobile operator on the mainland with a 6.6 percent market share.


Apart from the mainland, the company's Asia-Pacific businesses performed well. Regional shipment grew 12 percent while revenue climbed 13 percent to $469 million thanks to expanded business in India and ASEAN countries.


"With the opening of a new marketing hub in India and new manufacturing facilities in Mexico, India, the mainland and the US, Lenovo continues to invest in the key markets around the world and accelerate our ability to reach both existing and new regions," said William Amelio, the company's president and chief executive officer.


Lenovo's shares yesterday closed at HK$5.1 on the Hong Kong market, falling HK$0.34, or 6.25 percent.


(China Daily August 3, 2007)


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