Lenovo Group Profits Soar
Lenovo Group Ltd., the world's No. 4 personal computer maker, said Wednesday
its profits grew nearly sevenfold in its latest fiscal year as it boosted sales
and restructured following its acquisition of IBM Corp.'s PC unit.
Profits were $161 million for the year ending March 31, the Beijing-based company
said. That was up from $22 million in the 2005-06 fiscal year.
Lenovo's Americas operations returned to profitability in the fourth quarter,
meaning that all of Lenovo's global regions were profitable for the first time,
said CEO William J. Amelio.
"The fourth quarter was the first time we performed as the new Lenovo,"
Amelio said at a Hong Kong news conference. "We're very pleased with this
progress and we're confident we have made the right steps to maintain this progress."
Sales for the year ending March 31 rose 9.9 percent to $14.6 billion, helped
by strong sales of laptop and desktop computers in its home China market, Lenovo
said. The company said its worldwide market share rose 0.2 percentage points
to 7.4 percent.
For the fourth quarter, profits were $66 million, while PC shipments rose 17
percent, the company said.
Sales in the United States and the rest of the Americas rose 4 percent last
year, reversing a decline, the company said.
China is Lenovo's biggest market, supplying just over 38 percent of sales.
Lenovo has struggled to establish itself as a global brand amid fierce competition
from Hewlett-Packard Co. and Dell Co.
Lenovo became the world's No. 3 PC maker with the IBM
acquisition in 2005. But it lost that ranking this year to ambitious Taiwanese
rival Acer Inc., falling back to fourth place, according to Gartner Group, an
industry research firm.
Asked whether Lenovo managers were concerned about the fall in global rankings,
Amelio expressed confidence that new sales initiatives would help the company
"get in the right ranking."
The company announced last month it planned to launch a new unit to promote
sales to individuals and small businesspeople.
Lenovo also is rolling out promotional campaigns based on its status as a worldwide
"We will take full advantage of the Beijing Olympics," said chairman
Also Wednesday, Lenovo announced that Mary Ma, a senior vice president who
was a key figure in the IBM acquisition, was retiring after 17 years with the
Ma, one of the most prominent women in Chinese business, is to become a non-executive
vice chairwoman of Lenovo's board of directors.