Lenovo Q3 profits up by a quarter

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Lenovo has unveiled its latest set of financial results reporting a rise in net profit of 25 per cent.

The third quarter results mark the PC maker's best result in more than two years, thanks to a boost from a strengthening Chinese currency and lower component costs.

The company reported a net profit of $99.65 million for the October-December quarter, up from $79.5 million a year earlier. The result beat expectations for an $86.2 million net profit from seven analysts polled by Thomson Reuters I/B/E/S.

“The board is satisfied with Lenovo’s performance in this quarter in all aspects of measurement. For the fifth consecutive quarter, Lenovo has continued to be the fastest growing among the top five PC manufacturers globally. Volume, revenue, cost and expense, and pre-tax-income targets were all delivered...,” said Lenovo's chairman Liu Chuanzhi.

“While driving for business momentum, Lenovo will further increase investment in brand building and product development. I believe that today’s investment will bring good return to our shareholders in future. One of the keys to our success is that we are building a winning culture at Lenovo, and our success in the marketplace is a direct result of that effort.”

Consolidated sales in mature markets stood at $2 billion - a rise of 22 per cent year-on-year. PC shipments in these regions were also up by almost a quarter (23 per cent) thanks to an increase in demand in Western Europe and North America.

A ‘protect and attack’ strategy has helped Lenovo to grow its product portfolio, customer base and geographic presence, according to the company's chief executive Yang Yuanqing,

“Looking forward, we will invest in building our global brand, driving more product innovation and creating an even more efficient end-to-end business model," he added.

"Based on this, we are confident we can continue to outgrow the market and deliver strong results across our business.”

The results come a day after Dell reported forecast-beating earnings and margins on lower component costs and demand from companies replacing older technology.

Lenovo shares gained 2.5 per cent in 2010, lagging a 5.3 per cent advance by the benchmark Hang Seng Index.

(Additional reporting by IT PRO)

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