Lenovo announced its financial results for Q2 of fiscal year 2013/2014 and confirmed that profits for the quarter increased as a result of higher demand for PCs and mobile devices.
On Thursday, November 7, the Chinese technology firm announced revenue of $9.8 billion for the quarter ended September 30, which is an increase of 13 percent when compared to Q2 2012.
Net income for the company increased from $162 million in Q2 2012 to $219.7 million in Q2 2013, an increase of 36 percent. Analysts made a net income forecast of around $202.7 million for the quarter.
"Lenovo not only remains the top PC company in the world, but is also already the number four player in both smartphones and tablets worldwide and continues growing rapidly. At the same time, we have achieved record revenue and record profit, and improved profitability significantly." said Yang Yuanqing, Chairman and CEO of Lenovo. "We are optimistic about the industry's outlook. Benefiting from corporate refresh and China market improvement, the PC market is recovering, and tablet growth continues shifting to mainstream and entry-level segments, as well as emerging markets. These are Lenovo's strength areas. We are confident that we will capture these opportunities and continue our strong growth."
Lenovo announced at the earnings call that its global PC market expanded 17.3 percent in Q2 2013, when compared to 15.7 percent in Q2 2012. The global PC market is declining rapidly but the company still managed to increase its shipments by 2.2 percent.
Lenovo's smartphone shipments also contributed to the rise in profit for the quarter. The company's smartphone shipments for the quarter rose 78 percent to 12.3 million units in Q2 2013. Lenovo also ranked fourth in the global smartphone shipments during the quarter and its market share rose from 3.7 percent in Q2 2012 to 4.7 percent in Q2 2013.
Currently, the company sells its smartphones in China and nine other countries. However, Lenovo announced its plans to release its smartphones in more markets such as Middle East, Africa and Latin America. The company expansion plan may increase mobile devices sales increase to 50 percent in the next five years.
Share prices of the company rose by 2.1 percent after the earnings call.