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Shining light Lenovo records $8.7 billion sales

09 Nov 2012

Lenovo has continued its push towards becoming the number one vendor in the PC industry after reporting record quarterly sales of US$8.7 billion.

The PC-maker revealed an 11% increase year-over-year to grow faster than any of their rival top four PC companies for the third year running.

Recording pre-tax income at $204 million, the company says the results are evidence that they continue to build upon its track record of profitable growth.

“With the strong execution of our Protect and Attack strategy, Lenovo has continued its strong and balanced growth momentum," says Yang Yuanqing, chairman and CEO of Lenovo.

"Our global PC market share reached another historic high, moving us closer to our dream of becoming the worldwide PC leader.

"With four years’ effort, our Consumer PC business has become the world’s number one in this segment for the first time.

"Our smartphone business in China, which we started only two years ago, has again strengthened its number two position.

"More importantly, we not only grew rapidly, but also improved our profitability consistently, with pre-tax income reaching a record high this quarter.

"As emerging markets outside of China and Mature Transactional business have entered the profitable growth stage, and as our smartphone and other MIDH (mobile internet/digital home) business continue to grow, Lenovo’s overall profitability will continue to improve.”

During the second fiscal quarter, ending September 30, Lenovo’s worldwide PC shipments grew 10.3% in a difficult market which was down 8% year-over-year.

The record profits has ensured the company has grown faster than the PC industry as a whole for the 14th consecutive quarter, achieving it's highest-ever worldwide market share of 15.6% as a consequence.

Protect and Attack:

While the balanced growth has become a hallmark of Lenovo over the past three years, the results can be attributed to their focus on its “protect and attack” strategy.

By strengthening its position in places or markets where it enjoys a solid business, Lenovo has also ensured to reach outwards into new places or markets where opportunities to reach even more customers present themselves.

Lenovo says entering these new markets is essential to continuing its position as a leader in the PC Plus era, where tablets, smartphones and smart TVs continue to gain traction and capture record customer acceptance.

In addition to its share gains, the Chinese firm turned in net income of $162 million during the quarter, representing a rise of 13% year-over-year, with gross margin at 12.1%.

Gross profit increased 11% year-over-year to $1.1 billion, while operating profit reached $206 million, a 24% increase year-over-year.

Geographic overview:

Across the Asia Pacific/Latin America region, Lenovo achieved a record market share of 11.5% up 1.6 points year-over-year.

In a PC market that slumped by 10%, the company grew its PC shipments across the region by 5%, becoming the leading PC vendor in Japan, the world’s fifth largest PC market, and number one in India as well.