Lenovo Swings To Profit In U.S.

The Raleigh, N.C.-based company reported revenue of $3.4 billion for the quarter ended March 31, up 9 percent from $3.1 billion a year earlier. Lenovo posted a fourth-quarter profit of $60 million, compared with a loss of $116 million in the year-ago period.

In a conference with financial analysts in Hong Kong, which was webcast, Lenovo executives said their efforts in the United States have paid off as the company continued to enlist channel partners.

"We grew faster than the market [in the U.S.]. It resulted in market share gains in the U.S.," said Mary Ma, Lenovo's CFO.

"We recruited about 2,600 active [channel] partners that focus on serving the SMB market," Ma said. "America returned to profit this quarter. They were making a loss for three quarters, so this is a turnaround point for America."

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Lenovo also said it's expanding its relationship with IBM, in which IBM will continue to provide services and support to Lenovo accounts and make Lenovo its preferred PC partner. Lenovo is in its third year since buying IBM's PC business.

Lenovo CEO William Amelio said the company hit all of its strategic goals during the quarter, which contributed to what he described as a bounce back.

During the quarter, Lenovo announced a restructuring and layoffs, including some actions in the United States to help shore up its business there. In the previous quarter, the United States was the only geography where Lenovo lost money.

"The quarter's results have given us increased confidence in Lenovo's turnaround, and we know it's continuing," Amelio said.

Worldwide, Lenovo's notebook sales accounted for $1.9 billion of its revenue and grew at 17 percent, while desktops accounted for $1.4 billion and grew at 4.4 percent.

"The board believes the fourth-quarter performance is a turning-around performance, and they are satisfied," said Yang Yuanqing, Lenovo's chairman. "We believe our growth is sustainable."

For the full year, Lenovo reported that total sales rose 10 percent to $14.6 billion, with PC shipments up 12 percent. Earnings, including the impact of restructuring, came in at $161 million, the company said.