11/7/2013 12:52 AM ET
Chinese PC maker Lenovo Group Ltd. (LNVGF, LNVGY,LNVGF.PK) reported Thursday a surge in second-quarter profit as revenues were boosted by significant growth in sales of PC as well as Mobile Internet and Digital Home products. In the quarter, Europe/Middle East/Africa and Americas regions recorded double-digit revenue growth.
For the second quarter, profit attributable to equity holders climbed 36 percent to $220 million from $162 million a year ago. Earnings per share were 2.10 US cents, an increase from the prior-year figure of 1.55 US cents.
Gross profit increased 11 percent year-over-year to $1.27 billion, while gross margin declined 0.2 percentage points to 12.9 percent. Operating profit grew 38 percent to $283 million, while operating margin fell 0.8 percentage points to 10 percent.
Quarterly revenues climbed 13 percent to $9.77 billion from last year's $8.67 billion. According to the firm, strong global execution of its Protect and Attack strategy, innovative product portfolio and an increasing mix of PC Plus revenues drove the results.
During the quarter, the company sold 29 million devices, which is about four devices every second. Lenovo's PC shipments were 14.1 million units.
For the second straight quarter, Lenovo was the world's largest PC vendor, according to Gartner and IDC, with its market share of 17.7 percent, up 2 points from last year.
In the quarter, Lenovo's Laptop computers were the largest contributor to its revenue, generating 51 percent of total revenue. Consolidated sales for Lenovo's laptop PC business increased 8 percent, while across the industry, laptop shipments were down 12 percent. Lenovo's Desktop PC shipments grew 1 percent, compared to an overall industry decrease of 6 percent.
Consolidated sales of Lenovo's Mobile Internet and Digital Home or MIDH products, including smartphones, smart TV and tablets, increased 106 percent, and accounted for 15 percent of total revenues, up from 8 percent one year ago. In China, smartphone shipments increased 64 percent.
On a geographical basis, domestic revenues edged up 1 percent to $3.8 billion, and accounted for 40 percent of total revenues, driven by strength in smartphones and tablets. In the Asia Pacific region, revenue rose 1 percent.
Meanwhile, revenues from Europe/Middle East/Africa or EMEA region climbed 26 percent and the Americas region recorded a 37 percent jump in revenues mainly on strong PC volume.
In Hong Kong, Lenovo shares are currently trading at H$8.63, up H$0.21 or 2.49 percent.
