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February 3, 2010

Lenovo Q3 sales up 33% to $4.78bn

Notebook shipments worldwide grew 68% on year ago quarter

By CBR Staff Writer

Lenovo has reported consolidated sales of $4.78bn for the third fiscal quarter of 2009, an increase of 33.2% compared to the same period last quarter.

The company’s worldwide PC shipments increased 42% year over year, with a market share of 9%. Comparatively, industry PC shipments increased 17% worldwide for the same period.

The company’s gross profit for the third quarter grew 45.5%, compared to the third quarter of 2008, with gross margin of 11.1%, an increase of 0.9 percentage points year over year. Operating profit was $99m, double the profit of the previous quarter and an increase compared to an operating loss of $91m for the third quarter of 2008.

For the quarter ended December 31, 2009, the company posted profit attributable to equity holders of $80m, almost a complete reversal year-over-year, when compared to a loss attributable to equity holders of $97m.

During the third fiscal quarter, Lenovo announced its intention to acquire the entire interest of Lenovo Mobile Communication Technology from a group of investors led by Hony Capital, the private equity arm of Legend, for consideration of approximately $200m in cash and Lenovo shares.

Geographically, Lenovo China posted consolidated sales of $2.3bn for the third quarter, an increase of 45% year over year, accounting for 47% of the company’s worldwide sales. In emerging markets, consolidated sales totaled $857m while mature markets accounted for $1.7bn.

Lenovo’s notebook computers continued to be the largest contributor to the company’s sales worldwide, generating 62% of total sales revenue. The company’s notebook shipments worldwide in the third quarter were up 68% year-over-year, compared to an industry increase of 32%. Consolidated sales of desktop computers worldwide in the third quarter totaled $1.7bn, or 36% of Lenovo’s total sales revenue.

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Yang Yuanqing, CEO of Lenovo, said: For the first time since the acquisition of IBM PCD, Lenovo was the fastest growing PC company in the world. We have achieved our highest ever global market share for the third straight quarter and notably increased profitability.

“These achievements demonstrated the effectiveness of the strategies we mapped out at the beginning of the year. In the future, while we continue to expand our PC business, we also want to attack the mobile internet category to drive growth and capitalise our innovation efforts


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