Lenovo back in the black
Boosted by healthy consumer and corporate demand for its PCs, Lenovo enjoys a return to profitability and 56 percent sales growth for its fourth quarter.
Higher PC shipments helped Lenovo return to profitability in the fourth quarter.
The Hong Kong PC maker reported on Thursday a fourth-quarter net profit of $13 million versus last year's fourth-quarter loss of $264 million. Sales for the quarter ended March jumped 56 percent to $4.3 billion from $2.7 billion in the year-ago quarter.
The company credited the return to the black on stronger PC demand among both consumer and corporate buyers. For the quarter, Lenovo's global PC shipments grew 59 percent over the prior year's quarter, outstripping the industry's growth rate of 27 percent. That marked the fourth straight quarter in which the company surpassed its rivals in PC shipments and the second straight quarter in which it grew the fastest of the top five PC makers.
Lenovo's notebooks provided the biggest shot in the arm, contributing almost 62 percent of total revenue and bringing in $2.7 billion in sales for the quarter. Notebook shipments rose 76 percent from the year-ago quarter, compared with the industry average of 40 percent. The company reported encouraging sales of several new notebooks unveiled at January's CES, including the Y460 and Y560, and the new ThinkPad Edge and X100e.
Desktops also fared well, generating $1.5 billion in sales, a 41 percent gain from the prior year's quarter.
Lenovo continues to see the highest demand in its home turf of China, where quarterly sales rose 67 percent and contributed 45.3 percent of worldwide revenue. Sales in emerging markets, such as India, Southeast Asia, and Latin America, accounted for 17.2 percent of global revenue, while sales in mature markets, such as the United States, added up to 37.5 percent of overall revenue.
Globally, research firms such as Gartner and IDC have typically ranked Lenovo in fourth place among the top five PC makers in terms of shipments, behind HP, Acer, and Dell, and above Toshiba or Asus. But in the U.S., Lenovo drops off the top five list, with Toshiba and Apple taking the fourth and fifth slots.
For the full year, Lenovo's net profit hit the black as earnings reached $129 million, while annual sales grew 11.4 percent to $16.6 billion. As with the fourth quarter, annual results were boosted by growth in PC shipments, which rose 28.1 percent over the prior year, compared with the industry average of 10.7 percent.
The company also noted that it has completed its reacquisition of Lenovo Mobile and recently began shipping its new LePhone smartphone in China, its first venture into the smartphone arena.