Lenovo Unbowed By U.S. Slowdown
This morning the great news is announced – Lenovo has a great fiscal year. Some financial detailed could be found at the official financial report. The below news report by Melinda Peer is also very worthy of your reading.
Slower consumer spending dampened sales of personal computers in the U.S., but Lenovo barely felt it thanks to higher shipments to emerging markets.
China’s largest personal computer maker said Thursday that fourth-quarter demand grew fastest in its Europe, Middle East and Africa region, where shipments jumped 30.0% in the fourth quarter. The segment offset weak demand in the U.S. where consumers have cut back on spending, which spells trouble for U.S. tech companies that haven’t fostered strong overseas growth.
Lenovo, which bought the personal computer division of IBM (nyse: IBM – news – people ) in 2005, reported sales of $1.3 billion in its core Chinese market, an increase of 18.0% from 2007′s fourth quarter. The country’s sales accounted for 34.0% of Lenovo’s fourth-quarter sales.
Despite slowed notebook sales in the U.S., the Americas accounted for 27.0% of Lenovo’s quarterly sales, at $1.0 billion.
Lenovo, the world’s fourth-largest computer maker by sales, said fourth-quarter profit more than doubled to $140.0 million, or $1.44 a share, from $60.0 million, or 68 cents a share, in the previous year. The quarter’s earnings included a $36.0 million gain, or $65.0 million for the full-year, related to the sale of its mobile handset business, which had been dragging on Lenovo’s balance sheet. Last quarter, the unit’s shipments fell 31.0%. (See: ” Lenovo Triples Profit”)
Earnings before interest, taxes, depreciation and amortization rose 39.1% to $152.0 million from $110.0 million a year ago. The mean estimate of analysts polled by Reuters was for fourth-quarter earnings of $129.2 million.
Sales rose 13.5% to $3.7 billion from $3.3 billion in 2007′s fourth-quarter. The company’s global personal computer shipments grew 21.0%, surpassing the industry’s average growth of 15.0%.
“Looking forward, Lenovo will continue to maintain our momentum in the relationship business and the Greater China region, while pursuing growth opportunities in the emerging markets, notebook markets and transaction business, specifically the consumer business, and actively fostering new business to maintain profitable growth that out-paces the industry,” said the company’s chairman, Yang Yuanquing.
For the full-year, net profits tripled to $484.0 million from $161.0 million a year ago. Sales rose 17.0% to $16.4 billion and the Raleigh, N.C.-based company’s total shipments of personal computers increased 22.0%. The estimated industry average for personal computer shipments is 16.0%.
Also on Thursday, Lenovo said its board proposed a final dividend of 1.6 cents a share.
Lenovo shares have gained $1.25, or 8.1% at $16.60 from a month-ago in over-the-counter trading.
At the beginning of the year, Yang sparked concerns that Lenovo’s sales would slump due to the downturn in the U.S. economy since China depends heavily on exports to the U.S. for growth. (See: ” Lenovo: Fear And Loathing In Las Vegas”) Yang said the company would target emerging markets to drive growth.
In 2007, more than 60.0% of Texas-based Dell (nasdaq: DELL – news – people ) sales came from the Americas, according to Revere Research. Last month, the company announced stringent cost-cutting measures. (See: ” Dell Tries To Reboot, Again”)
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