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China’s Lenovo Group in the first quarter, its profit more than doubles, beats expectations

FILE PHOTO: A man uses his laptop next to the Lenovo logo during the Mobile World Congress in Barcelona, Spain, February 25, 2016. REUTERS/Albert Gea

(Reuters) – Chinese personal computer maker Lenovo Group has reported an over two-fold jump in first-quarter profit on Thursday, beating analysts ‘ estimates, thanks to robust performances from its personal computer and smart phones.

Net income rose to $162 million in the quarter ended in June, compared with a median estimate of $154 million, up by 9 analysts, according to the Refinitiv of the data. Revenue increased 5% to $12.51 billion, which is in line with our expectations.

Sales of Lenovo’s personal computers and smart devices of the group increased by 12%, while in the mobile business, the group recorded a 9% drop in sales.

The worldwide PC market grew by 1.5% in the June quarter, after falling for two consecutive quarters, as a threat of increased U.S. tariffs on Chinese goods prompted a number of manufacturers to meet the front-loading of shipments, the analysts said.

However, the outlook for the industry remains uncertain after the then US President, Donald Trump said on Tuesday he would postpone the imposition of a 10% tariff on Chinese-made products such as tablets and laptops, up to and including December, however it would be an imposition of the rates, it’s on the desktop at the end of September.

“There is a complexity of macro-risks relating to the ongoing negotiations on the trade, import, tariff adjustments will be made by the countries and the challenges in addition to geopolitical uncertainty,” Lenovo said in its earnings statement.

The company has dual headquarters in both China and the United States of america.

Reporting Rushil Dutta, and Sijia Jiang; Editing by Stephen Coates

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