Lenovo profits double to $123m after strong first quarter

Soaring sales in China help boost notebook sales by 23 per cent

Lenovo has posted a 51 per cent year-over-year rise in first-quarter profits to $123m on revenues of $5.9bn, after strong sales in its notebook PC operations.

The company estimated that notebook sales increased by 23 per cent over last year, bringing in $3.5bn in revenues.

Lenovo's solid PC sales come during a tough time for the industry as a whole. Earlier this summer research firm IDC cut its yearly sales forecast for the PC market to a growth rate of just 4.2 per cent.

Analysts believe that much of the drop is due to the soaring interest in tablets and smartphones.

"Since we adjusted our leadership team in early 2009, our business continues to climb and everything has been executed well according to our original plans," said Lenovo chairman Liu Chuanzhi.

"Lenovo has an outstanding leadership team, the right approach to developing strategies, and strong execution capabilities demonstrated by our performance this quarter."

China continued to be Lenovo's strongest market, accounting for 47.9 per cent of sales. Domestic sales hit $2.8bn on the quarter, and Lenovo estimates that it now controls 31.7 per cent of the Chinese PC market.

Sales in the US and western Europe hit $2.1bn during the quarter after an 8.5 per cent rise in shipments. US sales accounted for 30.8 per cent of Lenovo's PC business.

Lenovo expects its growth in the PC space to continue as the company integrates recently acquired German vendor Medion and develops a joint venture with NEC in Japan.