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Lenovo reports quarterly revenue tops $10b

By Gao Yuan (China Daily) Updated: 2014-02-14 07:18

Lenovo reports quarterly revenue tops $10b

A man walks past a Lenovo shop in Shanghai Jan 21, 2014. Lenovo Group Ltd on Thursday reported its quarterly revenue broke through the $10 billion barrier for the first time because of strong global demand. [Photo/Agencies]

It's the first time the PC vendor has broken through the milestone

Lenovo Group Ltd on Thursday reported its quarterly revenue broke through the $10 billion barrier for the first time because of strong global demand.

Top executives also explained to shareholders how they are going to maximize profit gains from the recent acquisitions that cost Lenovo more than $5 billion.

The world's largest personal computer vendor said the revenue in its third fiscal quarter that ended on Dec 31, 2013, stood at $10.8 billion, a jump of 15 percent year-on-year.

Earnings also surged 30 percent compared with a year ago to $265 million.

Yang Yuanqing, chairman and chief executive officer of Lenovo, said business in PC-plus areas, including smartphones, tablets and servers, was driving profit growth.

"The Motorola (Inc) and IBM (Corp) server acquisitions are a perfect fit with our PC-plus strategy," said Yang.

He also tried to calm investors who were questioning the company's profitability after spending $3 billion to acquire the money-bleeding Motorola Mobility from Google Inc. Motorola Mobility makes Android smartphones and Bluetooth accessories. Yang said the business will quickly begin contributing to the company's performance.

But Yang was hesitant to estimate his company's earnings prospects, saying the two acquisitions are still awaiting approval from the United States government. Consequently, the effect on short-term earnings are difficult to predict.

"Buying Motorola is a quicker way for Lenovo to access the premium smartphone market with a leading Android offering than trying to do it with its existing design teams and brand reach," said Frank Gillett, vice-president and principal analyst at Forrester Research.

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