Profits Blow Past Expectations

By Reuters  |  Print this article Print

Lenovo saw an improved third quarter and executives said the company was looking to acquisitions in its core business, PCs.

Lenovo posted a net profit of $76.6 million in its fiscal second quarter through September, up from the $53.1 million recorded a year ago, according to Reuters calculations based on data supplied to the Hong Kong stock exchange.

That also beat market expectations for a $66.75 million net profit, according to a poll by Thomson Reuters I/B/E/S.

China continued to make up the largest portion of Lenovo's sales, accounting for 47 percent of its total revenue in the second quarter, down from 48.7 percent in the April-June quarter.

Its mature markets business, much of which it inherited from IBM (NYSE:IBM), returned to profit for the first time since the global financial crisis with shipments growing 43.8 percent and making up for about a third of its total sales.

Operating profit margin, a key indicator for profitability in the sector, clocked in at 1.9 percent, better than the 1.58 percent it recorded in the April-June quarter.

Lenovo announced its results after the Hong Kong stock market closed on Wednesday. Its shares are up about 10 percent so far this year, lagging a 13 percent advance on the benchmark Hang Seng Index .HSI. (Editing by Muralikumar Anantharaman))