Lenovo fourth quarter profit up to US$42mn

The computer manufacturer posted full-year sales of US$21.6bn, full year net profit of US$273mn and net cash reserves of US$2.7bn as of March 31, 2011.

Lenovo Group announced on Thursday results for its fourth fiscal quarter and full year ended March 31, 2011. Lenovo was the fastest growing of the top five PC manufacturers for the sixth quarter in a row, and for the eighth quarter in a row outgrew the worldwide PC market as a whole. Lenovo’s continued focus on executing its “protect and attack” strategy across all geographies, customer segments and product lines, resulted in balanced growth throughout the year, leading to a record year ending double digit market share of 10.2 percent, according to a Lenovo report.

During the fourth quarter, Lenovo’s worldwide PC shipments increased 16 percent year-over-year, compared to an overall industry decline of 1.1 percent during the same period.

Consolidated sales for the fourth fiscal quarter grew 13 percent year-over-year to US$4.88 billion. The Company’s operating profit (excluding restructuring costs, one-off items and net other income) for the quarter grew almost 50 percent year-over year to US$69 million. Gross profit margin was at 12.3 percent, an improvement of 1.9 points.

For the quarter, Lenovo reported a pre-tax income of US$60 million, triple last year’s figure. Profit attributable to equity holders was US$42 million in the fourth quarter, more than triple last year’s result.

Basic earnings per share for the fourth fiscal quarter was 0.43 US cent, or 3.35 HK cents. 

Lenovo’s Board of Directors declared a final dividend of 0.64 US cents, or 5.0 HK cents per share for the fiscal year ended March 31, 2011.

For the 2010/2011 fiscal year, consolidated sales increased 30 percent to US$21.6 billion.

Lenovo’s PC shipments grew 28 percent year-over-year, compared to an overall industry increase of 7.4 percent. The Company’s pre-tax income was US$358 million. The full year profit attributable to equity holders was US$273 million, more than double last year’s result. Basic earnings per share for the 2010/11 fiscal year totaled 2.84 US cents, or 22.08 HK cents.

“Lenovo had a record-setting year and the Board of Directors is satisfied with both the quarterly and annual results. Lenovo’s performance is evidence that the Company is achieving its short-term and quarterly goals, while strengthening its long-term competitiveness. These results demonstrate that we have the right strategy in place and are executing on that strategy,” said Lenovo Chairman Liu Chuanzhi. “However, as we celebrate our success, we are very focused on the challenges we face as we continue to build our business worldwide. Our innovative products, our focused strategy and our strong culture, will remain the keys to our success in the coming year and beyond.”

“We are very satisfied with the progress of our strategy execution. We not only continue to gain market share in all geographies, customer segments and product lines, but also reported a significant improvement in profit. Our fourth quarter gross profit margin improved almost 2 points year-over-year." said Lenovo CEO Yang Yuanqing. “We enter our new fiscal year with the utmost confidence. By continuing to execute our ‘protect and attack’ strategy, Lenovo will be able to further accelerate our pace of growth in the PC industry while achieving good progress in new businesses as well, especially in the mobile internet area.”

Lenovo fourth fiscal quarter was highlighted by several significant announcements including the formation of the Company’s new Mobile Internet and Digital Home business group responsible for creating mobile-Internet focused devices, including tablets and smartphones, as well as devices for new categories like cloud computing, smart TV and the digital home.

Lenovo also announced the formation of a joint venture with NEC, creating the largest PC group in Japan, and giving Lenovo a leading market share position in two out of the three largest PC markets in the world.

In the product area, Lenovo’s focus on innovation was highlighted by the introduction of Lenovo’s first tablet which is being sold exclusively in China and is the first of several Lenovo tablet products planned for international release late in the year.