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Lenovo reports slimmer profit as sales rise

Lenovo reports slimmer profit as sales rise

Lenovo reported a slimmer profit for the first half of its fiscal year even as sales rose higher

Lenovo Group has reported a slimmer profit for the first half of its fiscal year, despite a rise in sales during the period.

Lenovo's revenue for the six month period ended on Sept. 30 was $US7.2 billion, up from $US6.2 billion during the same period last year. But the company's profit attributable to shareholders fell by 53 per cent during the first half of its fiscal year, from $US91.2 million to $US43.1 million, it said in a filing to the Hong Kong stock exchange.

The company saw a 10 per cent year-on-year increase in the volume of shipments for the second fiscal quarter, but pricing pressure meant that revenue for the quarter increased just 1 per cent year on year, to $US3.7 billion. Pre-tax income was $US43 million. The company blamed slow growth in mature markets and intensified competition for the small revenue increase.

It maintained its PC sales lead in China, increasing shipments there by 25 per cent during the quarter. China accounted for 39 per cent of Lenovo's total revenue for the quarter, at $US1.4 billion.

However, Lenovo lost ground in North and South America, with shipments there decreasing by 9 per cent. Sales in Asia-Pacific were flat, the company said.

Notebook computer sales accounted for 52 per cent of total revenue for the quarter, at $US1.9 billion. Lenovo notebook shipments were up 20 per cent year-on-year, it said. Its mobile handset business saw 39 per cent year-on-year growth in shipments, but accounted for only 4.5 per cent of total revenue, at $US166 million.

In August, Lenovo reported a profit of $US5 million on revenue of $US3.5 billion during the first quarter of its fiscal year. At that time, company officials said profits had been dragged down by costs related to layoffs and a restructuring program announced in March.


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