Lenovo reports first quarter 2013 / 2014 results [CPI Financial]
(CPI Financial Via Acquire Media NewsEdge) Ranked #1 PC maker in the world for the first time ever
Lenovo Group today reported results for its first fiscal quarter ended June 30, 2013, with quarterly revenue of $8.8 billion, a ten percent increase year-over-year. At the same time, Lenovo's first quarter pre-tax income increased 16 percent year-over-year to $215 million, while earnings grew 23 percent year-over-year to $174 million, "highlighting the company's continued focus on leading in the PC Plus era, while growing its business profitably across all geographies, customer segments, and product lines," said a media statement.
For the first time ever, Lenovo was named the world's largest PC vendor*, and in so doing, recorded its highest-ever quarterly market share of 16.7 percent up 1.7 points year-over-year. Lenovo's PC shipments for the first fiscal quarter were 12.6 million units, the 17th quarter in a row that Lenovo outperformed the industry as a whole, which was down 11 percent year-over-year.
Lenovo is also continuing to become a "PC Plus" company. During the first fiscal quarter. Lenovo was the third-largest supplier of smart-connected devices (including PC, smartphone and tablet products), growing shipments 41 percent year-over-year. Lenovo's combined sales of smartphones and tablets surpassed PCs for the first time ever during the quarter, demonstrating the momentum of these two businesses. During the first quarter, Lenovo became the world's fourth largest smartphone supplier and recorded the fastest growth among the top five vendors, growing 132 percent. The Company's smartphone success was further demonstrated by its results in China, where Lenovo is now the second largest smartphone company, growing an impressive 121 percent year-over-year.
The Company's gross profit for the first fiscal quarter increased 14 percent year-over-year to US$1.2 billion, with gross margin at 13.6 percent. Operating profit for the quarter grew 11 percent year-over year to US$202 million. Basic earnings per share for the first fiscal quarter was 1.67 US cents, or 12.96 HK cents. Net cash reserves as of June 30, 2013, totaled US$3.1 billion.
"In a tough PC market, Lenovo became the clear #1 for the first time and continues to improve profitability. Our strong performance in PC is fueled by balanced growth, through our consistent execution of the right strategy," Yang Yuanqing, chairman and CEO, Lenovo. "While driving profitable growth in our core PC business, we are rapidly transforming our company into a PC Plus company. The PC Plus market requires fast, efficient innovation as it moves quickly from premium products to mainstream ones and from mature market domination to emerging market hyper growth. This kind of market plays to Lenovo's proven strengths. Lenovo is now better positioned than our competition to take advantage of these clear trends. "
Lenovo's PC revenue in Europe/Middle East/Africa (EMEA) increased an eye-opening 18 percent in the first fiscal quarter year-over-year $1.9 billion, or 21 percent of Lenovo's worldwide revenue. During the quarter, Lenovo's PC shipments in EMEA increased 18 percent year-over-year in the quarter, compared to an overall industry decrease of PC shipments in the region of 22 percent. The Company recorded its highest-ever market share in the region of 13.2 percent, up significantly at 4.4 points year-over-year. In fiscal quarter one Lenovo achieved number one PC position in ten countries in the region, including Germany, and also became number one in Eastern Europe for the first time, further solidifying its number two position in the EMEA PC market.
Lenovo China totaled $3.7 billion in revenue in the first fiscal quarter, an increase of 5.6 percent year-over-year, and accounting for 42 percent of the Company's worldwide revenue. Lenovo's increased revenue growth in China was driven in large part by the success of its smartphones and tablets, which together grew 76 percent year-over-year, and demonstrated the Company's continued transformation to a PC Plus company. During the first quarter, Lenovo further strengthened its number-one position in China, resulting in an industry-leading market share in China of 35.8 percent.
In the Asia Pacific region, Lenovo's revenue totaled $1.3 billion for the first quarter, or 15 percent of the Company's worldwide revenue. Lenovo's unit shipments in Asia Pacific declined 8.1 percent year-on-year as the Company strategically balanced between growth and profitability passing on certain non-profitable education deals in India for example. During the first quarter, Lenovo continued to gain share and solidify its number one position in Japan, the world's fifth largest PC market. In ASEAN, the Company demonstrated strong growth with record high market share of 11.9 percent. Lenovo is currently the second largest PC provider in the region with 13.2 percent market share.
Americas revenue was $1.9 billion year-over-year for the first fiscal quarter, an increase of 29 percent year-over-year, comprising 22 percent of the Company's worldwide revenue. With strong results in both Brazil, the world's third-largest PC market and the U.S., Lenovo increased its market share in the Americas to 9.7 percent an all-time high for the region, up 2.1 points year-over-year, helping the Company maintain its number three position in the Americas PC market. In addition, Lenovo achieved double-digit market share in North America for the first time, benefiting by its strong growth in the U.S. commercial PC business, reporting a record-high share of 10.1 per cent. During the first fiscal quarter, Lenovo's PC shipments in the Americas increased 22 percent year-over-year in the quarter, compared to an overall industry decrease of PC shipments in the Americas of four percent, the statement concluded.
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