Lenovo, which posted a 13 per cent net profit rise on record sales for the past quarter, forecasts strong demand for its personal computers and smartphones to continue defying the global economic slowdown.
The computer maker yesterday reported net profit rose to US$162 million in the fiscal second quarter to September from US$143.9 million a year earlier. That exceeded the US$158.4 million average of eight analyst estimates compiled by Bloomberg.
Chairman and chief executive Yang Yuanqing attributed the solid gain to balanced growth across the company's four geographic markets - mainland China, the Asia-Pacific and Latin America, North America, and the region covering Europe, the Middle East and Africa.
"Despite the challenging environment, we achieved many key milestones," Yang said.
Lenovo, which has operations in more than 130 countries, saw revenue rise 11 per cent to a record US$8.7 billion from US$7.8 billion a year ago.
Lenovo shipped a record number of computers during the period, which helped it overtake close rival Hewlett-Packard to become the world's largest supplier of personal computers, according to market research firm Gartner.
Preliminary estimates by Gartner showed Lenovo seized a 15.7 per cent global market share - a historic high for the company - on personal computer shipments of 13.77 million units, which edged out HP's 15.5 per cent share at 13.55 million units. It also marked the 14th consecutive quarter that Lenovo has grown its shipments faster than the industry, which is faced with a worsening slump. Technology analyst firm IDC calculated an 8.6 per cent year-on-year drop in global personal computer shipments to 87.8 million units in the quarter to September.
Yang predicted a period of "hyper-growth" for Lenovo's smartphone business, which currently ships a range of devices on mainland China, India, Indonesia, the Philippines and Vietnam. "Last quarter, we sold 8.6 million phones," Yang said.
He said Lenovo was confident that its smartphones, produced under the company's fledgling mobile internet and digital home division, would become profitable "in the next couple of quarters". The unit is also responsible for developing and producing media tablets and internet-linked "smart" televisions.
Chief financial officer Wong Wai-ming said the company had consistently improved its profitability. It reported a 24 per cent year-on-year increase in pre-tax income in the quarter to a record US$204 million, from US$165 million in the previous year.
Lenovo, which has headquarters in Beijing and Morrisville, North Carolina, had net cash reserves of US$3.6 billion, which allowed it "to continue looking at merger and acquisition opportunities", Wong said.
Lenovo shares yesterday fell 2.66 per cent to close at HK$6.58.