Lenovo reports first quarter 2012/13 results
- United Arab Emirates: Saturday, August 18 - 2012 at 12:59
- PRESS RELEASE
Lenovo Group reported results for its first fiscal quarter ended June 30, 2012, with quarterly sales of $8bn, a 35% increase year-over-year. At the same time, Lenovo's first quarter net-income increased by 30%year-over-year, to $141m, demonstrating the Company's ability to maintain profitable growth in a challenging market.
In an industry where overall PC shipments were down almost two percent year-over-year, Lenovo's PC shipments for the first fiscal quarter increased 24.4% compared to last year, the 13th quarter in a row that Lenovo's growth has outpaced the PC industry as a whole. And for the 11th quarter in a row, Lenovo grew faster than any of the top four PC vendors.
Lenovo's growth was balanced across all geographies, customers segments and products lines, a result of the Company's continued focus on executing its "protect and attack" strategy of reinforcing its business in established markets while going after potential new markets. As the industry evolves to the PC Plus era, Lenovo has moved aggressively to ensure that the Company is well-positioned as the industry shifts to include more tablets, Smart TVs and smartphones in the product mix.
The Company's gross profit for the first fiscal quarter increased 30 percent year-over-year, with gross margin at 12 percent. Operating profit for the quarter grew 48% year-over year to $182m. Basic earnings per share for the first fiscal quarter was 1.37 US cents, or 10.63 HK cents. Net cash reserves as of June 30, 2012, totaled $3.7bn.
Two weeks ago, Lenovo announced a global partnership with EMC, forming a server technology development program that will help drive innovation and extend Lenovo's capabilities in x86 industry-standard servers. As part of this agreement, Lenovo will bring these servers to market on its own, and embed them in select EMC storage systems over time. Lenovo replaced a major competitor to establish an OEM and reseller relationship where Lenovo will provide EMC's industry-leading networked storage solutions to Lenovo customers worldwide, starting with China.
Lenovo and EMC have also agreed to a joint venture, majority-owned by Lenovo, bringing certain assets and resources from EMC's Iomega business to develop and sell Network Attached Storage (NAS) products to small/medium businesses and distributed enterprise sites worldwide.
The agreement with EMC is not material to Lenovo's earnings.
During the first fiscal quarter, Lenovo also announced the establishment of the Lenovo Industrial base in Wuhan, China, where the Company will build an integrated facility focused on the research, development and production of Lenovo mobile internet and digital home product lines. The facility is expected to open in October 2013.
"Although the economic environment is somewhat similar to the 2008-2009 downturn, Lenovo's results are much stronger because we have the right strategy and great execution," said Yang Yuanqing, Lenovo Chairman and CEO.
"Our businesses in emerging markets outside of China, our consumer business and MIDH business all achieved rapid expansion, providing the balanced pillars to support our overall performance. Our business in China and our global commercial business maintained strong profitability, which allows us to secure plenty of resources to invest in growth areas and ensure the company's overall healthy performance. Although we're in a challenging environment, we are confident that by continuing to execute our Protect and Attack strategy, Lenovo can achieve sustainable growth and healthy returns in the PC+ era."
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