Lenovo Group today reported results for its first fiscal quarter ended June 30, 2010, and for the third quarter in a row, Lenovo was the fastest growing of the top five PC manufacturers. During the first quarter, Lenovo achieved for the first-time ever, double-digit market share worldwide, and recorded its lowest-ever quarterly expense-to-revenue ratio. It was also the fifth consecutive quarter that Lenovo outgrew the industry.
During the first fiscal quarter, Lenovo’s worldwide PC shipments increased 48.1 percent year-over-year, compared to the industry’s growth rate of approximately 20.9 percent worldwide for the same period.
Consolidated sales for the first fiscal quarter increased 49.6 percent year-over-year to US$5.1 billion. The Company’s gross profit for the quarter increased 38.6 percent year-over-year to US$523 million, with gross margin at 10.2 percent.
Operating profit for the first fiscal quarter was US$82 million (excluding a US$1 million restructuring cost), a five times improvement over the same period last year. Lenovo reported a first quarter pre-tax income of US$75 million. Profit attributable to equity holders for the quarter was US$55 million, a US$71 million improvement year-over-year. Basic earnings per share for the first fiscal quarter was 0.57 US cent, or 4.43 HK cents. Net cash reserves as of June 30, 2010 totaled US$2.2 billion.
During the first fiscal quarter, Lenovo delivered its much-anticipated Lenovo smartphone to customers in China, the first smartphone product launched by the Company following the early 2010 acquisition of Lenovo Mobile, and the first product in Lenovo’s expanding portfolio of mobile internet devices.
“Following our outstanding achievement of the past financial year, Lenovo achieved an excellent first fiscal quarter based upon our original projections. Our performance was strong globally, Lenovo has a clear strategy when and where to focus on gaining share, and when and where to focus on maximizing profit, and we executed that strategy well,” said Lenovo Chairman Liu Chuanzhi. “Lenovo's management team continues to focus on executing our strategy, and despite the ongoing challenges and uncertainties of the world's economy, I firmly believe that Lenovo's future is bright.”
“With the right strategy and effective execution, Lenovo achieved its first ever double-digit PC market share worldwide, and was the fastest growing of the top five PC companies for the third consecutive quarter. We also delivered a solid start to our new mobile Internet business. We saw significant improvement in our profitability and our lowest-ever quarterly expense-to-revenue ratio. All these indicators represent a good start to the new fiscal year,” said Lenovo CEO Yang Yuanqing. “Looking ahead, we are confident that through the consistent strong execution of the strategies we have in place, together with continuing to drive our innovation competitiveness, business model and branding, we can continue to outgrow the market, and sustain our strong momentum.”