PARIS – Lenovo Group Ltd. said its business in the Americas returned to a profit in the first calendar quarter, helped by cost-cutting efforts and a 9 per cent increase in PC shipments.
The results announced this morning offer a bright spot for the computer maker, which recently dropped to fourth place in the global PC rankings, faced with faster growth by rivals Acer Inc. and Hewlett-Packard Co.
Lenovo’s overall revenue for the quarter — the fourth of its fiscal year — climbed 9 percent from a year earlier, to US$3.4 billion, helped by improved sales in all parts of the world, it said. Net profit was $60 million, up from a loss of $116 million in the same quarter in 2006.
Business was strongest in China, as usual, where PC shipments grew 24 per cent from a year earlier. Shipments grew 18 per cent in the rest of Asia Pacific, 14 per cent in Europe and 9 per cent in the Americas, the company said.
Worldwide, PC shipments growth was 17 percent, which Lenovo said was well ahead of the industry average. The trouble is, it was not faster than Acer and HP, which increased their shipments by 46 percent and 29 percent, respectively, according to Gartner Inc. That put HP at the top of the worldwide rankings, followed by Dell and Acer, pushing Lenovo into fourth place. IDC, another analyst company, had Lenovo and Acer sharing third place.
To increase growth Lenovo hopes to sell more computers through its Web site to home users and small businesses. It has rolled out that model in Germany, France, Italy and the U.K., boosting sales there considerably, it said. It will now push that same model in other parts of the world, including the U.S., Japan and Eastern Europe.
The company has also announced plans to cut its global workforce by 5 percent, or 1,400 workers, to help improve profitability.
Greater China accounted for 38 percent of overall sales in the quarter, followed by the Americas with 28 percent, Europe, Middle East and Africa with 21 percent, and the rest of Asia Pacific with 13 percent.
Lenovo also announced Wednesday that Mary Ma, its chief financial officer of seven years, has retired from the job effective immediately. Ma, who is 54, was described as one of the chief architects of Lenovo’s purchase of IBM’s PC division in 2005. She will be replaced by Wong Wai Ming, chairman of the Lenovo board’s audit committee.
IDG News Service