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HONG KONG: Lenovo Group Ltd, the world's third largest personal computer (PC) maker, posted a 22 per cent jump in its earnings in the July-September quarter, thanks to strong growth in the emerging marketplace.



Lenove Group postes a 22 per cent jump in its earnings in the July-September quarter, thanks to strong growth in the emerging marketplace. [newsphoto]

The firm that sells the largest number of PCs after Dell and Hewlett-Packard announced yesterday that its quarterly revenue ended September 30 up 404 per cent year-on-year to HK$28.5 billion (US$3.6 billion).

Its profit reached HK$354 million (US$45 million), reflecting positive customer response to innovative products and growth in emerging markets.

"The new Lenovo is already showing signs of achieving its potential, although we have much yet to do," chief financial officer Mary Ma said in a statement. "In financial terms, we have delivered another quarter of profit growth and our cash position is very good. Most importantly, the response from our customers has been very positive."

Lenovo has also seen its PC shipment for the second quarter grow 13 per cent

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on a yearly basis and operations in both home and abroad emerging markets posted strong profitability, although the Europe, Middle East and Africa (EMEA) markets reported a loss, according to the statement.

Chairman Yang Yuanqing said the operation in China and India has been showing strong momentum as the firm outpaces other PC makers in two of the world's largest developing markets.

"However, the company did not tap the fast-growing sectors of the small and medium business market in EMEA, and we recorded a lower revenue there," said Yang, adding that the group will be more aware of targeting the potential in the region.

Lenovo recorded a loss of HK$68 million (US$8.7 million) in EMEA markets, it said.

Since consolidating its leadership in the Chinese market, Lenovo has been trying to tap overseas markets for a few years now.

China is now the world's second-biggest PC market, with 15.8 million units shipped last year and the market is expected to grow more than 14 per cent this year and next, according to International Data Corp.

Lenovo now controls about a third of the market, but has come under attack from overseas giants Dell and Hewlett-Packard in recent years, as well as Taiwan's Acer Inc.

"Competition in the world's PC market is heating up," said Lai Wai-shing, associate director of Hantec Investment Holdings based in Hong Kong. "Lenovo has to explore more business opportunities on a global basis."

He said Lenovo's purchase of IBM's loss-making PC business for US$1.25 billion this year was an attempt to explore international markets.

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