updated 06:00 am EDT, Wed November 2, 2011
Lenovo outperforms market expectations
Lenovo has reported a stellar Q2 result that saw the company post an 88 percent profit jump over the same period last year. The result saw it beat market estimates by posting a $145 million profit, which was up from the $76.6 million Q2 result in 2010. Analysts had expected a profit of $118 million.
The company noted that its worldwide PC shipments grew 35.8 percent year-over-year, which represented seven times the PC industry growth rate of 5 percent. Consolidated sales totaled $7.8 billion while it also achieved its highest ever quarterly market share of 13.5 percent.
Lenovo benefited from a market strategy that saw it target the burgeoning Chinese market. This saw helped the company takeover the number 2 PC maker slot, previously held by Dell. It is strategy has also seen it release smartphones and tablets in the Chinese market first, before making them available in other markets.
However, against this, analysts predict a less optimistic outlook for Lenovo, along with the rest of the PC industry. The severe flooding in Thailand has constrained hard drive supplies while weak demand in established markets such as the US and Europe could start to take its toll on Lenovo's ongoing growth.
Lenovo's shares have risen 12.45 percent this year and gained 4.87 percent on Wednesday. [via Reuters]