Chinese PC maker Lenovo continued to defy a sluggish market in its fiscal third quarter, posting a 44 percent gain in sales and a 54 percent jump in profits that blew past analysts' expectations.
Aggressive pricing, a strong line-up of products, acquisitions in Germany and Japan and surging smartphone sales in China -- combined with missteps by its competitors -- contributed to the robust results for the quarter that ended Dec. 31.
Although based in China, Lenovo has an executive headquarters in Morrisville that employs about 1,800 workers.
The company, which surged from No. 4 to No. 2 in worldwide PC shipments in 2011, for the first time ranked first in worldwide shipments of PCs for businesses and in desktop models for consumers, CEO Yang Yuanqing told analysts. The company's strength in business computers is a legacy of its 2005 acquisition of IBM's PC business.
"Our strong momentum just got even stronger," he said. "Now Lenovo has been the fastest-growing major PC company for nine quarters."
Analyst Alberto Moel of Sanford C. Bernstein & Co. told Bloomberg News that the company benefitted from aggressive pricing and U.S. companies replacing aging computers.
"The U.S. corporate business is very important for them," he said.
U.S. shipments rose 40 percent in the quarter compared to a year ago.
The company's "four-screen strategy" -- PCs, tablets, smartphones and TVs -- also is paying off.
Sales of Lenovo smartphones, which aren't available in the U.S., were more than four times higher than the immediately preceding quarter in China, Yang said. The company also is introducing its first "smart TV" in China in April.
"Despite uncertainties in the global macroeconomic environment, we remain confident in continuing our trend of outperforming the worldwide PC markets," Chief Financial Officer Wong Wai Ming said.
Lenovo's PC market share in China exceeded 35 percent in the quarter, the company's largest ever and greater than the next four competitors combined. China is the world's largest PC market.
Sales for the quarter totaled $8.37 billion, up from $5.81 billion a year ago. Profit totaled $153 million, up from $100 million.
Market research firm IDC pegged Lenovo's worldwide market share in the fourth quarter at 14 percent, second to HP's 16.3 percent.
David Ranii has been a business reporter at The News & Observer since 1993. Over the years he has covered information technology, banking, insurance, the pharmaceutical and biotechnology industries, media businesses and real estate. Contact him at 919-829-4877 or 
