Lenovo on the lookout for acquisitions

Lenovo is planning to dip into its $2.5bn (£1.55bn) cash reserves to fuel an acquisition strategy in the PC market.

Lenovo is planning to dip into its $2.5bn (£1.55bn) cash reserves to fuel an acquisition strategy in the PC market.

The CFO Wong Mai confirmed the move in an hour long conference call with analysts as it outlined fiscal second quarter numbers, with sales up 41% to $5.8bn (£3.6bn) and profits rising 45% to $77m (£47m).

"We will be looking for opportunities that will relate to our core which is the PC," he said. "We keep on looking at that, but it's difficult to give you any specifics now."

The firm made an ill-fated attempt to acquire Packard Bell in the summer of 2007, but was beaten to the punch by Acer, which also bagged Gateway and eMachines in the same deal. Lenovo has not opened its war-chest since.

In contrast, US goliath HP has forked out billions in numerous deals for firms such as EDS, 3Com, Palm and 3Par, while Dell has also racked up conquests outside of the commoditised PC arena, buying Perot Systems and EqualLogic.

The results filed today represent the fourth consecutive quarterly gains since Lenovo enacted a turnaround plan following losses and the sacking of its CEO Bill Amelio.

Sales in China grew 32% to $2.6bn, the operation in the emerging markets soared 65% to $1.1bn and revenues in the mature markets were $2.1bn, up from $1.48bn a year earlier.  Worldwide shipments grew 33% compared to an industry average of 9.7%.

Looking ahead to Q3, Mai said the corporate replacement cycle would continue to pick up in the mature markets and the forecast growth in China to be above the worldwide industry average.

"We remain optimistic about the worldwide PC market outlook in spite of macro challenges," he said.

Read more on Desktop PCs

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.