Hong Kong-listed Lenovo Q3 net up 18 pct yr-on-yr on strong China sales UPDATE

Hong Kong-listed Lenovo Q3 net up 18 pct yr-on-yr on strong China sales UPDATE

	Published : Thu, 01 Feb 2007 12:10 By : Agencies Print this Story

HONG KONG (XFN-ASIA) - Lenovo Group Ltd said its net profit for the third quarter to December stood at 57.73 mln usd, up 18 pct from the year-earlier 48.92 mln due to robust sales in China and increased overall shipments of personal computers.

'Continued high growth in our China business enabled Lenovo to hold global market shares,' Lenovo chairman Yang Yuanqing said in a statement.

China shipments increased 17 pct year-on-year in the three months to December, the company said.

Sales in China stood at 1.6 bln usd, representing 40 pct of the company's total revenue.

Lenovo said its worldwide shipments of PCs in the quarter grew 8 pct year-on-year, against the industry average of 7 pct.

Revenue for the quarter stood at 4.0 bln usd, slightly higher than the 3.98 bln achieved a year earlier.

Earnings per share (EPS) stood at 0.67 US cents, up from 0.53 cents a year ago.

For the nine months to December, Lenovo's net profit stood at 101 mln usd, for EPS of 1.17 cents. The nine-months profit was 27 pct lower than the comparative figure of 138 mln usd in the year-earlier period.

Revenue for the nine months stood at 11.17 bln usd, up from 10.15 bln a year earlier.

Lenovo booked restructuring cost of 2.3 mln usd in the third quarter, while for the nine months to December the costs stood at 23.66 mln usd.

The restructuring charges stem from its acquisition of IBM's PC business in April 2005.

EBITDA in the three months to December stood at 128 mln usd, excluding restructuring charges, Lenovo said.

The company said it continued to lead the PC market in China in the third quarter to December. However, Lenovo PC shipments in the Americas fell 4 pct during the quarter. Consolidated revenue in the Americas totaled 1.0 bln usd, or 26 pct of total revenue.

In the Europe, Middle East and Africa region (EMEA), shipments increased 3 pct in the fiscal third quarter. Consolidated revenue in EMEA totaled 913 mln usd, or 23 pct of total revenue, it said.

Shipments for the Asia Pacific business, excluding greater China, decreased 1 pct in the third quarter. Revenue in the Asia Pacific totaled 460 mln usd, representing 11 pct of total revenue.

Across product lines, Lenovo's notebook shipments in the third quarter were up 20 pct year-on-year with consolidated revenue of 2.1 bln usd, representing 52 pct of the company's overall sales.

Lenovo's desktop shipments were up 2 pct in the period contributing 1.7 bln usd in revenue, about 43 pct of overall sales.

Shipments of Lenovo's mobile handset business fell 6 pct in the quarter. Revenue from the business stood at 146 mln usd, or 4 pct of the sales.

'All of our geographies except the Americas reported profitability this (third) quarter in a very competitive market,' said Yang.

He said Lenovo must address the challenge of lowering the expense-to-revenue ratio and increasing operational efficiency.

'Transformation takes time, but we are confident that we have the right plan in place to achieve our goals and deliver enhanced shareholder returns,' he added.

William J. Amelio, Lenovo's president and chief executive officer, said: 'We remain sharply focused on our four strategic initiatives -- rolling out the transaction model, improving product competitiveness, enhancing our supply chain and building our brand around the world.'

He said these are key to delivering revenue and profit momentum, cost reductions and enhanced efficiency in order to boost the company's competitiveness.

(1 usd = 7.8 hkd)

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