Lenovo Group today reported results for its second fiscal quarter ended September 30, 2013 , with quarterly revenues of $ 9.8 billion , a 13 percent increase over the previous year. The second-quarter profit grew even faster , with income before deduction of taxes of $ 265 million , which increased by 30 % over the previous year , and earnings of U.S. $ 220 million, an 36 % increase over the year above. Lenovo reported a record 29 million devices sold this quarter , representing about 4 devices sold per second. The strong performance of Protect and Attack strategy of the company, its innovative portfolio of products and a growing mix of earnings per PC Plus , were those who generated these results .
For the second consecutive quarter, Lenovo was the largest PC manufacturer in the world * , with a higher market share in its history of 17.7 %, 2 points higher than the same period last year . Position as No. 1 in five of the seven major PC markets , covering one third of the world population , said this performance as solid . The Lenovo PC sales for the second fiscal quarter were 14.1 million units , which again made him the PC maker fastest growing among the top 5 . This was the 18th consecutive quarter that Lenovo outperformed the industry in general.
This company continues to diversify its business and building a solid foundation for the future in the era PC Plus , with outstanding performance on PCs and mobile devices such as tablets and smartphones. The mix of sales in the second quarter of Lenovo MIDH product ( mobile Internet and digital home ), which includes smartphones , smart TVs and tablets business , representing 15 % of total revenue , an 8 % stake last year and 4% from two years ago , with a steady increase profitability.
In fact , Lenovo was second in the ranking of combined sales of PCs and tablets , and was the third largest provider of online Smart Devices category, which includes computers, smartphones and tablets , with sales growth of 36% over the previous year . Combined sales of smartphones and tablets from Lenovo exceeded those of PCs for the second consecutive quarter . Also continued to be the fourth largest smartphone vendor in the world, rapidly expanding its sales by 78 % over the previous year . Smartphone sales in China continued strong growth of 64% over the previous year . Finally , Lenovo saw record sales of 2.3 million tablets globally, 4.2 times more than the previous year , sales generated outside China. Taken together, these results show the rapid transformation that is going through Lenovo to become a company of PC Plus.
" Lenovo not only remains the largest PC company in the world, but was ranked fourth in both smartphones and tablets worldwide and continues to grow rapidly . At the same time, we achieved record revenues and earnings , and improved considerably our profitability, "said Yang Yuanqing , Chairman and CEO of Lenovo . " We are optimistic about the prospects for the industry. With the benefits of corporate renewal and improvements in the Chinese market , the PC market is recovering and growth in tablets continues to move to the standard and basic segments , as well as the emerging markets . these are the areas of strength of Lenovo . confident that we will capture these opportunities and continue this strong growth . "
The Company's gross profit for the second fiscal quarter increased 11% compared with the previous year , reaching U.S. $ 1.27 billion , with a gross margin of 12.9 %. Operating earnings for the quarter were U.S. $ 283 million grew 38 % over the previous year . Basic earnings per share for the second fiscal quarter was 2.12 U.S. cents, or 16.44 HK cents . Net cash reserves as at September 30, 2013 , totaled 2.6 billion U.S. dollars. Lenovo 's Board of Directors declared an interim dividend of HK $ 6 per share.
OVERVIEW BY GEOGRAPHY
The region of China totaled U.S. $ 3.8 billion of revenue in the second fiscal quarter, an increase of one percent over the previous year accounting for 40 % of company revenues globally. The Lenovo revenue growth in China was generated by the force of smartphones and tablets , which together grew 45% over the previous year . During the second quarter , Lenovo further strengthened its position as No. 1 in China , which resulted in a market share leader in China with 33.9 %, 0.2 points above the previous year .
In the Asia Pacific Lenovo revenues totaled U.S. $ 1.5 billion during the second quarter or 15% of total revenues of the company worldwide. The solid execution generated strong growth in smartphone sales and improved profitability of geography. Lenovo got a record in the geography of Asia Pacific , with a market share of 14.5 % PC , 0.1 point higher than the previous year . With continued leadership in Japan and overgrowth in the consumer markets of India and Indonesia , the company became the No. 1 consumer PCs in Asia Pacific for the first time, with a 12.7 percent share of market. In AP , also reached a milestone , which sold more than a million smartphones and tablets.
Lenovo's revenue in the Europe / Middle East / Africa ( EMEA ) continued to grow rapidly , with a 26 % increase in the second fiscal quarter was U.S. $ 2.3 billion , or 23 % of revenues Lenovo worldwide . During this quarter , Lenovo PC had record sales in EMEA , 15% are 4.2 points from the previous year . Lenovo became the No. 1 in PC in 12 EMEA countries, strengthening its position as number 2 in the EMEA PC market .
In the Americas region revenue was U.S. $ 2.2 billion in the second quarter , an increase of 37 % over the previous year , which represents 22 % of company revenues globally. The volume of PC in the Americas group was 39% over the previous year , allowing Lenovo to outperform the market by 43 points . The geography of Americas had a record market share of 11.3 % , up 3.5 points from the previous year . This was the first time that Lenovo achieved a market share of double-digit Americas geography as well as the first time you get the double-digit share of regions of the United States and Latin America . With a solid implementation of the acquisition of CCE and a new manufacturing plant in Brazil , the largest PC market in the world, Lenovo peaked at No. 1 in that market too.
PRODUCT OVERVIEW
In the second fiscal quarter, Lenovo Laptop computers were the biggest contributors to the total earnings of the company worldwide, generating 51% of total revenue from Lenovo . Across the industry , sales of laptops were 12% lower than last year. Despite the difficult environment, the consolidated sales of Lenovo laptops worldwide during the second fiscal quarter , totaled U.S. $ 5 billion , up 8 % from the previous year . The company gained 2.6 points of share and achieved a market share of 18.5%. In the consumer electronics show IFA Annual , which took place in Berlin during the second quarter , Lenovo introduced new models of its ThinkPad line of business notebooks , the ThinkPad T440 and X240 , 20% thinner than previous models and all more battery life . While Lenovo announced new portable consumer with two modes , the Flex 14 and 15, the screens can be pulled back at 300 degrees for use in stand mode , tactile experience for a more natural and comfortable .
Sales Lenovo Desktops grew 1 % worldwide over the previous year during the second quarter , compared with an overall decline of 6% industry . As a result , Lenovo gained 1.3 share points from the previous year and reached a record market share of 16.5%. Consolidated sales of Lenovo desktop computers declined 3 % during the second quarter, reaching the U.S. $ 2.7 billion , equivalent to 28 % of total sales revenue worldwide Lenovo . In the second quarter , Lenovo showed several new additions to the line of All- in-ones leading industry E93z ThinkCentre servers , E73z and M73z , which come with the option of multi -touch screens , better cable management and new mounting options for vertical movements , pan and tilt , including flat position optimized for touchscreen use . Also announced during the quarter the next generation of the popular ThinkCentre M93p "Tiny" Lenovo , known as the desktop PC that measures the same as a golf ball.
Consolidated sales and product Mobile Internet Digital Home ( MIDH ) , including smartphones and tablets increased 106% in the first fiscal quarter, reaching U.S. $ 1.5 billion , representing 15 % of total company revenue worldwide. In China, Lenovo's smartphone sales increased 64 % over the previous year , helping the company to maintain its strong position as the second largest supplier of smartphones in the market . In the annual IFA electronics show , which took place in Berlin during the second fiscal quarter, Lenovo launched the Yoga 2 Pro , the successor to the original Yoga folded and rotated 360 degrees , and the ThinkPad Yoga , one convertible multimode designed with focus on business functions . Also at IFA , Lenovo wowed consumers with its new smartphone Vibe X , the newest member of the portfolio of premium smartphones from Lenovo, and the new tablet S5000 , one of the thinnest tablets in the market with only 7.9 mm thick.
Last week , Lenovo launched the much anticipated Tablet Yoga multimode , with up to 18 hours of battery life . This product is the last step of Lenovo in its continuing effort to build a consumer brand . Lenovo partnered with Ashton Kutcher, the renowned actor and technology investor with 15 million followers on Twitter , to show this cutting-edge technology and innovation . Finally , Lenovo went even further with its brand with the launch of the second flagship store in Beijing in August , with plans to open more stores in the coming years.
