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Thursday, 16 August 2012 10:15

Lenovo profits up by 30 per cent

Written by Nick Farrell

lenovo

Better than predicted

Lenovo posted a 30 percent rise in quarterly net profit, beating the forecasts of the fortune tellers and readers of entrails in Wall Street.

The results were not all good news.  Lenovo had its slowest growth in the last year mainly due to lackluster demand in some emerging markets and North America.

But that is really a tribute to how fast Lenovo has been growing lately. The ThinkPad maker has been advancing on the global PC stage due to aggressive pricing, overseas acquisitions and a fast-growing home market.

Lenovo said in a statement that although challenges to worldwide PC demand remain largely due to weakening economic condition, Lenovo remains both optimistic about the future of the PC market and committed to innovation. Lenovo posted a net profit of $141.4 million for its April-June first quarter, up from $108.8 million from a year earlier.

The net profit growth was the slowest since the third quarter of fiscal 2010/2011, when the pace was about 25 percent. The result was better than an average forecast of $131.2 million of Wall Street analysts.

Lenovo's profit margin has been lagging those of rivals such as Dell. Its gross profit margin was down 0.5 percentage point in the first quarter from 12.5 percent a year earlier due to price competition in emerging markets and China.


Nick Farrell

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