Lenovo says 3Q profit up by half on strong sales

HONG KONG (AP) -- Computer maker Lenovo Group Ltd. said Thursday that quarterly profit grew by more than half as acquisitions in Germany and Japan boosted sales.

The world's No. 2 computer maker said that net income rose to $153 million, or 1.46 cents per share, in the October-December period. That's up 54 percent from the same period the year before.

Sales jumped 44 percent to a record $8.4 billion as its share of the global personal computer market hit a high of 14 percent.

Lenovo posted strong sales growth in China and emerging markets. But it said strongest sales growth came in mature markets, helped partly by new a joint venture with NEC Corp. in Japan and the purchase of Germany's Medion AG, a maker of multimedia products and consumer electronics, that were completed in July.

The company said gross profit margins dipped in the quarter because of higher prices for hard disk drives. Flooding in Thailand last year shut down production at a swath of hard drive factories, crimping global supply.

Lenovo said the impact of the floods on hard drive production will "likely continue to affect PC supply" into the next quarter.

"Although challenges to worldwide PC demand remain, such as the pace of global economic recovery and the ongoing debt crisis in Western Europe, and even hard disk drive supply shortage and cost increase, Lenovo remains optimistic that its growth momentum will continue," the company said in a statement.

(This version CORRECTS Adds details, quote; Corrects earnings per share figure to 1.46 cents, not $1.46, in paragraph 2)