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Tuesday, November 01, 2005

Lenovo Reports Triple-Digit Sales Growth


PC maker Lenovo reported second-quarter revenue growth of 404 percent, attributing the hefty gain to organic growth and its acquisition of IBM’s PC business.

For the quarter ended Sept. 30, sales totaled $3.7 billion, according to the Purchase, N.Y., company, whose parent is based in China. Pretax earnings came in at $65 million, and profit for shareholders rose 2 percent, the company said.

Lenovo issued its second-quarter report from Hong Kong, where much of its international operations are located. The company’s earnings press conference, also in Hong Kong, wasn’t broadcast to media in the United States.

The financial report was the first that included a full three-month period of contributions from the former IBM PC business. Lenovo closed that acquisition April 30, and the company said industry reports show that it turned in a 13 percent growth in unit PC shipments during that time.

"The new Lenovo is already showing signs of achieving its potential, although we have much yet to do," Lenovo CFO Mary Ma said in a statement.

Lenovo has yet to officially roll out its new terms and conditions for the U.S. solution provider channel. Company executives have begun preliminary discussions with some members of its channel advisory panel and said they expect to begin detailing the new channel program--expected to be less restrictive in many aspects than IBM's--over the next couple of weeks.

Lenovo's mostly upbeat financial report stands in contrast to that of rival Dell, which reported Monday that its profit would be at the lower end of its earlier forecast and sales for the current quarter would be below expectations. Dell cited weakness in its U.S. consumer and U.K. businesses, as well as a charge of $450 million, most of which the Round Rock, Texas-based PC giant said will pay for the cost of fixing "previous-generation Optiplex desktop systems" that didn't perform up to company standards.

For its part, Lenovo said much of its sales growth was fueled by shipments of its ThinkPad notebooks, as well as a refresh of its ThinkCentre desktop PC lineup.

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