Lenovo reported a 23 per cent surge in first-quarter profit as the world’s largest maker of personal computers gained a greater portion of the global market for desktop models and mobile devices.
Net income climbed to $213.5 million in the three months ended June from $173.9 million a year earlier, the company said today in beating analysts’ estimates.
Chief executive officer Yang Yuanqing also said in an interview the company is negotiating with “multiple” US government agencies to win approval for more than $5 billion of planned acquisitions.
With the PC market in contraction, Yang has kept the company growing by winning share as he expands the smartphone and tablet-computer businesses. After rapidly expanding mobile- phone sales in its home base of China, the company is extending sales into the Middle East, Africa and Latin America while pursuing deals to bolster expansion.
“Looks like strength everywhere - their emerging markets business in both smartphones and PCs seemed relatively strong,” said Alberto Moel, an analyst at Sanford C. Bernstein in Hong Kong.
“The PC contraction is now heading into the late stages, and Lenovo is driving the consolidation to its advantage.”
Lenovo rose as much as 2.1 per cent in Hong Kong, while the benchmark Hang Seng Index was little changed.
The stock has gained 22 per cent this year. IBM, Motorola In January, the company announced plans to buy Google's Motorola Mobility unit for $2.91 billion in cash and stock.
The same month Lenovo agreed to buy IBM’s low-end server unit for $2.3 billion.
The purchase will add a business with wider profit margins than PCs and give it about 14 per cent of that market, the company has said.
Both transactions are in the process of getting regulatory approval, and the company hopes they can close by the end of this year, Yang said in an interview today after earnings.
Bloomberg
