Lenovo Group (LNVGY:OTC) Returns 65% Higher Profits

Posted August 8, 2008

"Lenovo, China’s biggest personal computer-maker, reported a 65% jump in first-quarter profit yesterday (Thursday), thanks primarily to strong performances in its European/Middle East/Africa (EMEA) marketing region." — Jason Simpkins, Money Morning

by Stephanie Grimmett

Baltimore — (TFN): I love being right.

Jason Simpkins of Money Morning just alerted readers to the stellar first quarter (of fiscal 2008) earnings of Lenovo Group (LNVGY:OTC), and I’m trying not to crow over the results.

Lenovo is the Chinese PC manufacturer that bought IBM’s personal computer division in 2005 (The two companies still maintains good relations. Lenovo is currently talking to IBM about producing a line of products for the non-Microsoft PC user… you know, those people who use operating systems like Linux instead of Windows.).

A little more than a year ago (last May, to be exact), I predicted Lenovo was about to hit the big leagues when it came to sales. And this quarter Lenovo saw a 65% rise in profits, mostly because of expansion in its European, Middle East and African markets.

And that 65% gain was after a small slide in sales in its North and South American markets, where, at least in the U.S., many customers are putting off major purchases until economic sentiment becomes more positive.

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But sales in Lenovo’s native China rose 22% last quarter, and the company is an official sponsor of the Beijing Olympics.

Yep, all of those computers in the Olympic press centers (the ones that censored reporters’ access to unsanctioned Chinese history sites and the homepages of several Hong Kong newspapers) were provided by Lenovo. I know the company must be so proud to be a part of the government’s "facilitation" of the foreign press.

The company is also managing the technical support for international and local television broadcasters at the Olympics and the actual computer equipment for China’s Olympic organizations.

And what has this experience taught Lenovo? Well, let’s wait and make sure everything works during the next two weeks, but ahead of that, Lenovo says they’ve learned how to manage a huge operation and quickly adapt products for specific corporate customer’s needs, which is important when you’re moving into the overseas market and learning to adapt your products to the desires and needs of foreign consumers.

Lenovo has great profits this year, but this is only the beginning for the company’s growth. So here’s one line of crowing: "Woohoo! I told you Lenovo rules!"

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