Lenovo Group today reported results for the third fiscal quarter
ended December 31, 2006. Lenovo's consolidated revenue for the third
quarter increased slightly year over year to US$4.0 billion.
During the third fiscal quarter, Lenovo's worldwide PC shipments
grew approximately 8 percent, ahead of the industry average of
approximately 7 percent. For the same period, Lenovo reported pre-tax
income of US$64 million and basic earnings per share for the third
quarter of 2006/07 of 0.67 US cents, or 5.2 HK cents. Net cash
reserves as of December 31, 2006, totaled US$1.3 billion.
"Continued high growth in our China business enabled Lenovo to
hold global market share," said Yang Yuanqing, Lenovo's chairman. "All
of our geographies except the Americas reported profitability this
quarter in a very competitive market. While we are pleased with these
accomplishments, we must continue to work diligently to address our
most critical challenges of lower expense-to-revenue ratio and
operational efficiency. Transformation takes time, but we are
confident that we have the right plan in place to achieve our goals
and deliver enhanced shareholder returns."
William J. Amelio, Lenovo's president and chief executive officer,
said, "During the quarter, we made tangible progress toward our
operational goals, although we still have much to accomplish. We
remain sharply focused on our four strategic initiatives: rolling out
the transaction model, improving product competitiveness, enhancing
our supply chain and building our brand around the world. These are
the key to delivering the revenue and profit momentum, cost reductions
and enhanced efficiency that will make Lenovo an even stronger global
competitor."
GEOGRAPHIC OVERVIEW
-- During the third quarter, Lenovo continued to lead the PC
market in Greater China, with shipments to the region
increasing 17 percent. Consolidated revenue for the third
fiscal quarter totaled US$1.6 billion, or 40 percent of the
Company's total revenue, including the Company's mobile
handset business, which is conducted primarily in China.
-- Lenovo PC shipments in the Americas decreased 4 percent in the
third fiscal quarter. Consolidated revenue in the Americas
totaled US$1.0 billion in the third quarter, or 26 percent of
total revenue.
-- In the Europe, Middle East and Africa region (EMEA), shipments
increased 3 percent in the third fiscal quarter. Consolidated
revenue in EMEA totaled US$913 million in the third quarter,
or 23 percent of total revenue.
-- Shipments for the Asia Pacific business (excluding Greater
China) decreased 1 percent in the third fiscal quarter.
Consolidated revenue in Asia Pacific totaled US$460 million in
the third quarter, or 11 percent of total revenue.
PRODUCT OVERVIEW
-- Lenovo's Notebook shipments in the third fiscal quarter were
up 20 percent year over year, and consolidated revenue was
US$2.1 billion, or 52 percent of the Company's total revenue.
-- Lenovo's Desktop shipments were up 2 percent year over year in
the third fiscal quarter. Consolidated revenue was US$1.7
billion in the third quarter, or 43 percent of the Company's
total revenue.
-- Shipments of Lenovo's Mobile Handset business (conducted
primarily in China) decreased 6 percent in the third fiscal
quarter and consolidated revenue of US$146 million, or 4
percent of the Company's total revenue.
About Lenovo Group Ltd.
Lenovo (HKSE: 992) (ADR: LNVGY) is dedicated to building the
world's best-engineered personal computers. Lenovo's business model is
built on innovation, operational efficiency and customer satisfaction
as well as a focus on investment in emerging markets. 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 worldwide.
Lenovo has major research centers in Yamato, Japan; Beijing, Shanghai
and Shenzhen, China; and Raleigh, North Carolina. For more
information, see www.lenovo.com.
