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Lenovo Group Profits Soar

Lenovo Group Ltd., the world's No. 4 personal computer maker, said Wednesday its profits grew nearly sevenfold in its latest fiscal year as it boosted sales and restructured following its acquisition of IBM Corp.'s PC unit.

Profits were $161 million for the year ending March 31, the Beijing-based company said. That was up from $22 million in the 2005-06 fiscal year.

Lenovo's Americas operations returned to profitability in the fourth quarter, meaning that all of Lenovo's global regions were profitable for the first time, said CEO William J. Amelio.

"The fourth quarter was the first time we performed as the new Lenovo," Amelio said at a Hong Kong news conference. "We're very pleased with this progress and we're confident we have made the right steps to maintain this progress."

Sales for the year ending March 31 rose 9.9 percent to $14.6 billion, helped by strong sales of laptop and desktop computers in its home China market, Lenovo said. The company said its worldwide market share rose 0.2 percentage points to 7.4 percent.

For the fourth quarter, profits were $66 million, while PC shipments rose 17 percent, the company said.

Sales in the United States and the rest of the Americas rose 4 percent last year, reversing a decline, the company said.

China is Lenovo's biggest market, supplying just over 38 percent of sales.

Lenovo has struggled to establish itself as a global brand amid fierce competition from Hewlett-Packard Co. and Dell Co.

Lenovo became the world's No. 3 PC maker with the IBM acquisition in 2005. But it lost that ranking this year to ambitious Taiwanese rival Acer Inc., falling back to fourth place, according to Gartner Group, an industry research firm.

Asked whether Lenovo managers were concerned about the fall in global rankings, Amelio expressed confidence that new sales initiatives would help the company "get in the right ranking."

The company announced last month it planned to launch a new unit to promote sales to individuals and small businesspeople.

Lenovo also is rolling out promotional campaigns based on its status as a worldwide Olympic sponsor.

"We will take full advantage of the Beijing Olympics," said chairman Yang Yuanqing.

Also Wednesday, Lenovo announced that Mary Ma, a senior vice president who was a key figure in the IBM acquisition, was retiring after 17 years with the company.

Ma, one of the most prominent women in Chinese business, is to become a non-executive vice chairwoman of Lenovo's board of directors.

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