Lenovo’s sales up 17 percent to US$16.4 billion

The results were driven by strong performance in all geographies and product segments. During the fourth quarter, Lenovo’s worldwide PC shipments grew 21 percent, well ahead of the industry average growth of approximately 15 percent.

Shipments for the Asia Pacific business (excluding Greater China) increased 18 percent in the fourth fiscal quarter. Consolidated sales in Asia Pacific totalled US$543 million in the fourth quarter, or 15 percent of total sales. Market share gains in Japan and volume gains in ASEAN, Australia and New Zealand were offset by investment in India.

As previously announced, Lenovo completed the sale of its mobile handset business in March 2008 in order to better focus on its core PC business. As a result, the Company recorded approximately US$65 million as a pre-tax gain on disposal.

Taking into consideration the operating loss, the profit from the mobile handset business amounted to US$36 million and US$20 million in the fiscal fourth quarter and full year, respectively.

Consolidated sales for the quarter from continuing operations (excluding the mobile handset business) rose 13.5 percent year over year to US$3.7 billion. The Company’s gross profit margin for the fourth quarter reached 15.0 percent. Including the impact of restructuring, Lenovo reported pre-tax income of US$103 million from continuing operations.

Including the net profit of US$36 million from discontinued operations, profit attributable to shareholders for the quarter grew 133 percent to US$140 million.
Basic earnings per share totalled US$1.56 cents, or 12.17 HK cents. Net cash reserves as of March 31, 2008, totalled US$1.6 billion. Lenovo’s board of directors has proposed a final dividend of 12.80 HK cents, or approximately US$1.64 US cents per share.

Lenovo chairman Yang Yuanqing said in the past three years since the acquisition, Lenovo has successfully achieved the financial targets which we set and accomplished numerous milestones. “Lenovo will continue to pursue growth opportunities in the emerging markets, notebook markets and transaction business, specifically the consumer business, and actively fostering new business to maintain profitable growth that outpaces the industry.”

Lenovo Greater China posted US$1.29 billion in consolidated sales in the fourth fiscal quarter, up 18 percent, as the Company’s growth of 25 percent in PC shipments outpaced the industry average for the Greater China market. During the quarter, Lenovo further strengthened its number one market position on the strength of sales across product lines. The company’s Greater China business accounted for 34 percent of total sales in the quarter.

The Americas accounted for US$1.0 billion in consolidated sales, or 27 percent of total sales. The quarter marked Lenovo’s fifth consecutive profitable quarter for the Americas, on the strength of desktop market share gains and overall PC demand in Canada. Lenovo also improved productivity in the region, cutting controllable expenses. Sales of notebooks in the U.S. were affected by a slowing economy, although Lenovo maintained its overall U.S. market share. Lenovo PC shipments in the Americas during the quarter increased 9 percent.
In the Europe, Middle East and Africa region (EMEA), shipments increased 30 percent in the fourth fiscal quarter. For the same period, consolidated sales totaled US$879 million, or 24 percent of total sales. Sales growth was spurred by demand for notebook computers, despite some weakening in consumer demand.

hardware