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Lenovo Posts Revenue Records

Hong Kong — Lenovo reported strong growth from PCs and tablets in the fourth quarter and full fiscal year to help achieve new company earnings records.

Lenovo said it achieved full-year volume records of 55 million PC sales, 50 million smartphone sales and 9.2 million tablet sales, helping achieve record annual revenue of $38.7 billion, up 14 percent.

Full-year pretax income reached another record $1.01 billion, up 27 percent, and passing the $1 billion milestone for the first time.

Full-year earnings were $817 million, up 29 percent, for another company record.

The company reported net cash reserves of $3.5 billion (as of March 31, 2014).

Lenovo said it expanded its No. 1 position in PCs, adding 2.1 points of market share to post a record 17.7 percent total share for the full year, representing 5 percent year-over-year growth, compared with an overall industry decline of 8 percent during the same period.

Even as China’s PC market slowed, Lenovo said its operating profit from the category in China improved by 1 percentage point.

The Asia Pacific territory reported a record share of almost 15 percent, while improving profitability.

In the U.S., Lenovo surpassed Apple to take the No. 3 position in PC shipments in the fourth quarter, the company said.

Lenovo’s PC shipments to the Americas in the fourth fiscal quarter increased 18 percent year over year, as the market fell almost 8 percent. The company said it gained 2.5 share points to a record high market share of 11.4 percent.

Consolidated sales from the Americas grew 23 percent year over year to approximately $2 billion in the fourth quarter, driven by strong growth across all products, the company said. This represented 21 percent of Lenovo’s total worldwide sales.

Lenovo said it also continued to invest in its fast-growing Brazil and Latin America businesses in the period.

“With 20 consecutive quarters of outgrowing the PC market, Lenovo continued to show it can post rapid growth in absolute shipment and in relative market share metrics, even in difficult markets,” Lenovo said in a statement.

When combining tablets and PCs together to form the “PC + tablet” category, Lenovo sold a record 64 million devices, up nearly 18 percent year over year, outpacing the market by more than 13 percentage points, the company said.

Lenovo posted record total device volume of 114 million, up 37 percent year over year.

Lenovo said it sold more tablets and smartphones than PCs for the fourth quarter in a row.

 “The record sales and profits that we delivered last year prove that Lenovo can grow and deliver its commitments, no matter the market conditions,” said Yuanqing Yang, Lenovo chairman and CEO. “Not only did we strengthen our leading position in PCs, but we gained three points in tablets by quadrupling sales volume and became the fastest-growing major smartphone company in the world. 

“This demonstrates our capability to manage both businesses that are already mature, as well as those that are shifting to maturity.  Meanwhile, we are building new engines for growth in the enterprise and ecosystem. Through the combination of our existing and new businesses, Lenovo offers tremendous value to shareholders today, and our value will be even greater in the future.”

Gross profit for the full year was $5.06 billion, an increase of 14 percent year over year. Gross margin was 13.1 percent, while operating profit for the full fiscal year was $1.05 billion, up 32 percent year over year.

For the fourth quarter, Lenovo posted revenue of $9.4 billion, up 19 percent year over year, and pretax income of $212 million, up 28 percent increase over the same period last year.

The company’s gross profit for the fourth fiscal quarter grew to $1.24 billion, an increase of 18 percent year over year. Gross margin was 13.3 percent. Operating profit for the fourth quarter was $231 million, up 37 percent year over year, while earnings grew 25 percent year over year to $158 million.