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Lenovo Q2 profit surges 19 per cent, revenue lags estimates

Lenovo said its revenue climbed up by 7 per cent to US $10.5 billion, but sales from its mobile device division plunged 6 per cent to US $1.4 billion.

Gerry Shih | November 6, 2014 | Updated 13:13 IST
Lenovo Q2 profit surges 19%, revenue lags estimates
(Photo: Reuters)

Lenovo Group, the world's largest personal computers (PCs) maker, reported a 19 per cent jump in net income in the second fiscal quarter, but revenue fell short of analyst expectations, sending the company's shares lower in foreign markets.

The Chinese technology firm, which has been muscling its way into the smartphone market, said its revenue for the quarter climbed up by 7 per cent to US $10.5 billion, but sales from its mobile device division plunged 6 per cent to US $1.4 billion.

Still, the Beijing-based company, tightened its hold over global PC sales even as the broader market shrunk. Sales of both laptops and desktop computers rose 0.9 per cent and 6.4 per cent, respectively.

Lenovo's net income stood at US $262 million, exceeding the US $260 million expected by analysts, according to Thomson Reuters SmartEstimates.

The tech firm also announced a dividend payment of HK $0.06 (US $0.0077) per share to stockholders.

Lenovo is now ramping up its assault on new product markets after closing two multi-billion-dollar acquisitions in recent weeks, for IBM's low-end server business and Google's Motorola Mobility handset unit.

The company additionally named Jerry Yang, the Yahoo co-founder, to its board of directors. Yang, who is also an Alibaba Group Holding director, formerly served as a Lenovo board observer.

Shares of Lenovo shed 2.46 per cent in Thursday afternoon trade, compared with a 0.1 per cent decline in the benchmark Hang Seng index.

(Reuters)

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