August 7th, 2008
Profits up, but margins fall at Lenovo
Lenovo Group, the world’s fourth-largest PC maker, saw quaterly earnings rise 65% for Q1, but profit margins fall dramatically.
Net profits rose to $110.49 million, up from $66.84 million a year ago, but profit margins in the US fell dramatically to 0.3% from 3.4%. Even in China margins fell from 7.3% a year ago to 6.8%. The company blamed the economic slowdown in the US and weaker demand in China following a devastating earthquake.
Details here.
Lenovo is up against some big hitters (it ranks fourth, behind HP, Dell and Acer) but it benefits from holding onto a large market share in China. This could give the company an edge if rivals see significant falls in profit margins in the US. It’ll be interesting to see if Lenovo still ranks fourth this time next year.
Adrian is a technology journalist and author who has devoted over a decade to helping users get the most from technology. He also runs a popular blog called The PC Doctor. See his full profile and disclosure of his industry affiliations
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