Lenovo put an end to three straight quarters of losses and posted a net profit in the second quarter, which was caused by cost controls and robust growth in China. However, it warned the operating environment in the remaining months of this fiscal year ending March 31 will remain challenging. That is, it will be hard to make a quid.
Chairman Liu Chuanzhi, seen here in a teleconference, said, "The worldwide personal computer market has not recovered yet and Lenovo is still facing different problems. We will no doubt work hard to resolve those problems, but it will take time. Hence, we hope you won’t set excessively high expectations for us and give us room to grow."
Lenovo, which bought IBM’s personal computer business in 2005, said its net profit for the three months ended Sept. 30 more than doubled to $53.08 million from $23.44 million a year earlier. Revenue fell 5.2% to US$4.10 billion from US$4.33 billion a year earlier
Chief Executive Yang Yuanqing said companies are still delaying replacing personal computers, and the outlook for the global economy remains uncertain. He said, "We expect corporate replacement won’t start until the second half of next year."
Lenovo said its component costs are still rising and a continuous shift of its product mix toward lower-priced computers will also exert pressure on its operations.
China’s largest PC maker by shipments said Microsoft’s Windows 7 operating system gives the company significant opportunities and will play an important role in expanding its market share and growth in the coming few years.
Wall Street Journal said Lenovo attributed the rise in its computer shipments to China’s growing PC market and its expansion into consumer and emerging markets.
Second-quarter PC shipments to Mainland China, its largest market, rose 28% from a year earlier, Lenovo said. China accounted for $2.0 billion, or 49%, of its total revenue.