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China's Lenovo Group first-quarter profit more than doubles, beats expectations

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By Reuters
China's Lenovo Group first-quarter profit more than doubles, beats expectations
FILE PHOTO: The Lenovo logo is seen in this illustration photo January 22, 2018. REUTERS/Thomas White/Illustration/File Photo   -   Copyright  Thomas White(Reuters)

(Reuters) – Chinese personal computer maker Lenovo Group <0992.HK> reported a more than two-fold jump in first-quarter profit on Thursday, beating analysts’ estimates thanks to robust performance by its personal computer and smart-devices business.

Net profit rose to $162 million (£134.4 million) in the quarter ended June, compared with an average estimate of $154 million by 9 analysts, according to Refinitiv data. Revenue rose 5% to $12.51 billion, in line with expectations.

Revenue from Lenovo’s personal computer and smart devices group grew 12%, while its mobile business group recorded a 9% fall in sales.

The global PC market rose 1.5% in the June quarter after falling for two consecutive quarters, as threats of increased U.S. tariffs on Chinese goods prompted some manufacturers to front load shipments, industry analysts said.

However, the outlook for the industry remains uncertain after U.S. President Donald Trump said on Tuesday that he would postpone imposing an additional 10% tariff on Chinese-made products including tablets and laptop computers until December, but would impose the tariffs on desktops from September.

“There is a complexity of macro risks arising from ongoing trade negotiations, import tariff changes implemented by countries and challenges alongside geopolitical uncertainties,” Lenovo said in its earnings statement.

The company is dual-headquartered in China and the United States.

(Reporting by Rushil Dutta and Sijia Jiang; Editing by Stephen Coates)