This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Lenovo Reports Third Quarter 2012/13 Results

"With the strong execution of our 'Protect and Attack' strategy, Lenovo has not only achieved record revenue, profit and global PC market share last quarter, but also our smartphone and tablet businesses have delivered hyper growth. Even more, our worldwide tablet and China smartphone businesses have become profitable," said Yang Yuanqing, chairman and CEO, Lenovo Group. "As we continue into the PC Plus era, Lenovo has already laid a solid foundation. Our new organization will provide the structure to elevate our diversified business and drive it to the next level. We are confident that we can win through differentiation and will be the innovation leader in the PC Plus era."

GEOGRAPHIC OVERVIEW

  • Lenovo China achieved US$4.1 billion in consolidated sales in the third fiscal quarter, an increase of 17 percent year-over-year, accounting for 43 percent of the Company’s worldwide sales. Lenovo’s PC Plus strategy fueled outstanding performance in China with 83 percent MIDH revenue growth and a revenue contribution in China of 22 percent. The Company achieved an important milestone with China smartphone achieving profitability for the first time. Lenovo grew its number-one PC market share position in China, the world’s largest PC market, to 36.7 percent, up 1.4 points year-over-year. Lenovo’s PC shipments in China grew two percent year-over-year in the quarter, a solid result given that the overall China PC market was down two percent.
  • In the Asia Pacific/Latin America region, Lenovo achieved 11.3 percent market share in the third fiscal quarter, up marginally year-over-year. In a PC market that was down nine percent year-over-year, the Company grew its PC shipments across the region by four percent. Lenovo continued its run as the leading PC vendor in Japan. Consolidated sales across the region totaled US$1.7 billion for 18 percent of Lenovo’s worldwide sales, while operating margins continued to be profitable.
  • Lenovo in Europe Middle East & Africa grew PC shipments by 25.5 percent and became the second largest PC seller in this region, with 11 percent market share, an increase of 3.2 share points year-over-year. This was the Company’s first ever quarter to reach the number two position in the region. These achievements were made despite the headwind of overall industry decline in shipments of 11 percent across the region. The Company had consolidated sales in the third quarter of US$2.3 billion, a year-over-year improvement of 17 percent, good for 25 percent of Lenovo’s total worldwide sales.
  • Lenovo’s PC shipments in North America in the third fiscal quarter increased 11 percent year-over-year, in a market that fell by about seven percent. In this environment, the Company gained 1.5 share points to a record high market share of nine percent. Consolidated sales grew eight percent year-over-year to US$1.3 billion in the third quarter, or 14 percent of Lenovo’s total worldwide sales. Also, for the first time in North America, Lenovo made significant inroads into the high-end consumer space, taking a large slice of sales of Windows 8 powered convertible devices – including 30 percent share of the US$700-and-above market and 45 percent share of the US$900-and-above market.

PRODUCT OVERVIEW

  • In Laptop PCs, the Company’s worldwide shipments during the third fiscal quarter were up 9.5 percent year-over-year, helping Lenovo gain 2.6 share points and achieve market share of 15.8 percent. Across the industry, laptop shipments were down 8.6 percent year-over-year. Lenovo’s laptop computers continued to be the largest contributor to the Company’s sales worldwide, generating 52 percent of Lenovo’s total sales revenue. Consolidated sales for Lenovo’s laptop PC business worldwide in the third fiscal quarter totaled US$4.8 billion, an increase of eight percent year-over-year. During the third quarter, Lenovo took the industry by storm, announcing a new family of convertible devices, touch optimized for Windows 8: the 11” and 13” Yogas, IdeaPad Lynx and ThinkPad Twist. Lenovo also announced ThinkPad X1 Carbon Touch, adding touch experience to the industry’s leading business-class Ultrabook, and ThinkPad Twist, a business-ready device that puts a new spin on the traditional convertible tablet.
  • Lenovo’s consolidated sales of Desktop PCs worldwide increased one percent year-over-year in the third fiscal quarter to US$2.8 billion, or 30 percent of Lenovo’s total sales revenue. The Company’s desktop PC shipments worldwide in the third quarter increased 5.8 percent year-over-year worldwide, compared to an overall industry decrease of 6.8 percent. As a result, Lenovo gained 1.9 share points year-over-year and achieved a record-high market share of 16.1 percent. During the third quarter, Lenovo announced its new IdeaCentre Q190, the world’s smallest full-function desktop PC – measuring just 22mm (0.86 inches) wide – and the latest additions to the C-series all-in-one (AIO) family, featuring affordable, but powerful performance, and multimedia capabilities designed for immersive entertainment.
  • As China’s second-largest provider of smartphones and tablets, Lenovo’s MIDH group continues to rapidly build its business. With consolidated sales of US$998 million, a 77 percent year-over-year increase in the third fiscal quarter, MIDH contributed 11 percent to the Company’s overall sales. Year over year, Lenovo gained 4.7 share points in the China smartphone market in the third quarter for an overall market share of 12.3 percent in China. This business achieved profitability as well. During the third quarter, Lenovo announced that it would begin selling smartphones in Russia, in addition to previously announced India, Indonesia, Philippines and Vietnam. These five countries plus China, represent 44 percent of the world’s population, and give Lenovo a strong sales presence in these important emerging economies.

ABOUT LENOVO

Lenovo (HKSE: 0992) (PINK SHEETS: LNVGY) is a US$30 billion personal technology company – one of the top two PC makers in the world and an emerging PC Plus leader – serving customers in more than 160 countries. Dedicated to building exceptionally engineered PCs and mobile internet devices, Lenovo’s business is built on product innovation, a highly-efficient global supply chain and strong strategic execution. Formed by Lenovo Group’s acquisition of the former IBM Personal Computing Division, the Company develops, manufactures and markets reliable, high-quality, secure and easy-to-use technology products and services. Its product lines include legendary Think-branded commercial PCs and Idea-branded consumer PCs, as well as servers, workstations, and a family of mobile internet devices, including tablets and smart phones. Lenovo, a global Fortune 500 company, has major research centers in Yamato, Japan; Beijing, Shanghai and Shenzhen, China; and Raleigh, North Carolina. For more information see www.lenovo.com.

*See IDC data, 4Q 2012

     

FINANCIAL SUMMARY

For the third quarter ended December 31, 2012

 

(in US$ millions, except per share data)

 
 
 

Q3 12/13

   

Q3 11/12

   

Y/Y CHG

 
Sales 9,359     8,372     12 %
Gross Profit 1,101     954     15 %
Gross Profit Margin 11.8 %   11.4 %  

0.4

pt

Operating Expenses (858 )   (761 )   13 %
Expenses-to-Revenue Ratio 9.2 %   9.1 %  

0.1

pt

Operating Profit 243     193     26 %
Other Non-Operating Expenses 3     (1 )   NA  
Pre-tax Income 246     192     28 %
Taxation (46 )   (38 )   22 %
Profit for the period 200     154     30 %
Non-controlling interests 5     (1 )   NA  
Profit attributable to equity holders 205     153     34 %
EPS (US cents)
Basic 1.99 1.50 0.49
Diluted 1.96     1.46     0.50  




Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs