(Reuters) – Chinese PC maker Lenovo Group has reported an over two-fold jump in first-quarter profit on Thursday, beating analysts estimates thanks to strong sales of personal computers.
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
But it is the world’s largest manufacturer of personal computers, warned that the outlook is uncertain due to the trade dispute between the United States and China.
“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 has dual headquarters in both China and the United States of america, said in a statement.
The US President, Donald Trump said this week that 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.
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 frontload the shipments, the analysts said.
Lenovo emerged as the biggest winner of the global PC market is the surprise of a pick up in the second quarter of the year. The quote in the industry, the company said that it will be a record of 25.1% of the market share in the quarter.
Lenovo said that it will be the world’s fastest-growing PC maker among the top five manufacturers, an improved product mix also contributed to the business’ pre-tax profit margin increase of 5.4%, the highest margin ever for a fiscal first-quarter results.
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.
Lenovo PC’s and smart devices in a business that generates more than three-quarters of the group’s total revenue, which increased by 5%.
Net income rose to $162 million in the quarter ended in June, compared with a median estimate of $154 million from nine analysts, according to the Refinitiv of the data. Revenue rose to $12.51 billion, which is in line with our expectations.
Reporting Rushil Dutta, and Sijia Jiang; Editing by Stephen Coates and Muralikumar Anantharaman