Lenovo Group Ltd., a Chinese multinational technology company headquartered in Beijing, China and also the largest PC manufacturing company, reported on Thursday that the first-quarter net profit of the company has risen by a big margin of 64%. This great profit thus beat all the figures guessed as strong PC sales set-back the tepid demand of smartphones.
According to the report, the total profit rose from $105 million (approximately 10.9 billion PKR) to $173 million (approximately 18.1 billion PKR) for the quarter that ended this June in the same period as the last year. The average estimated by Thomson Reuters SmartEstimates was $130.1 million but the actual profit is much more than that.
From the last year, the total revenue of the first-quarter fell by 6% to $10.05 billion, when compared to the amount estimated by analysts, which was $9.63 billion.
Lenovo’s CEO and chairman Yang Yuanqing declared in his statement in the stock exchange, “The PC market performed slightly better than expected due to stronger performance in mature markets.”
The CEO further added, “Competition in the China smartphone market remained very keen while demand remained soft due to the slow economy.”
During the quarter mentioned, the company strengthened its hold on the slacking market of personal computers. The dispatch of PCs dropped by 2% as compared to previous year corresponding to the broader industry’s fall of 4 percent.
The company, like its peer Xiaomi, has been trying to diversify away from the vivid competition of products that have much lower profits. It remains the largest mobile phone market but is affected by the slacking economy of China.
Moreover, mentioning the competition from domestic rivals with extended sales companies in China such as the Huawei Technologies Co Ltd, Jefferies analyst Ken Hui mentioned in a notice prior to the actual results, that the company had an “urgent need to formulate a sustainable strategy in smartphones, particularly in China.”
The researcher website TrendForce reported that in the period of April-June, Lenovo had a share of 4.5% of the world’s smartphones. While, the leading smartphone manufacturing companies Samsung Electronics and Apple Inc. are having shares of 24 and 15 percent respectively. Lenovo still remains at 7th place in the smartphones race.