Feb. 2, 2007 (China Knowledge) - Lenovo Group, the biggest PC maker in China, said third-quarter net profit rose 23%, its best quarterly results since purchasing IBM's PC arm in 2005.

Net profit grew more than expected to US$57.7 million, or 67 US cents per share, in the three months to December, compared with US$46.8 million, or 53 US cents, a year earlier. Its profits for the nine months ending on Dec. 31, however, dropped by 27% from $138 million in 2005 to $100 million last year.

Sales for the Hong Kong-listed company increased 0.3% to US$4 billion while its worldwide PC shipments grew about 8%, slightly above the industry average of 7%. 

However, the company recorded disappointing financial performance in the Americas. The company had announced last week that its Americas president, Scott Smith, was leaving Lenovo to pursue other interests.

Lenovo's Americas business, facing competition from rival computer maker Dell, reported sales of US$1.04 billion, compared with US$1.15 billion for the same period a year earlier, while losing US$3 million compared with a US$25 million profit for the same quarter one year earlier.

The company, however recorded strong performance in a number of areas. In addition to its brisk pace of growth in China, where the company has a long history, Lenovo saw 20% growth in its core notebook business and 2.2% growth in desktops.

Lenovo CEO William Amelio said the company has made strides in building acceptance of its Lenovo brand worldwide. Amelio detailed improvements Lenovo has made in its worldwide operations, following targeted layoffs and some restructuring launched last year.

He said that the cost-cutting programs helped Lenovo “respond effectively to intense pricing pressure and slow demand in the enterprise space." Amelio also added that Lenovo, which acquired the former IBM PC Co. almost two years ago, has stopped relying on IBM's sales force as a leading business driver.