China’s Lenovo revenue falls for third consecutive quarter as PC demand slumps

China’s Lenovo Group Ltd (0992.HK) on Wednesday reported a 24% fall in revenue for the January-March quarter, meeting market expectations, as demand for personal computers (PCs) continued to slump.

The world’s largest PC maker said fourth-quarter revenue was $12.63 billion, down 24% from the same period a year earlier and marking the third consecutive quarter of on-year decline.

The result compared with the $12.74 billion average of eight analyst estimates compiled by Refinitiv.

For the full year through March, revenue shrank 14%, marking the first annual decline since 2019.

The outbreak of COVID-19 gave a huge boost to electronics sales as consumers and companies alike stocked up on equipment or upgraded existing gear to accommodate a shift to remote work.

However, revenue started contracting last year as demand began to fall. For the previous quarter, Lenovo reported a decline in revenue of 24%, its steepest in 14 years.

Global PC shipments across the industry declined 29% in January-March to 56.9 million units, fewer than the same period in pre-pandemic 2018 and 2019, showed data from researcher IDC.

To improve profit margins, Lenovo has been expanding non-PC businesses, such as in smartphones, servers and information technology (IT) services.

For the full year through March, its non-PC businesses grew 7% and now make up about 40% of total revenue.

Overall net income attributable to shareholders in January-March fell 72% to $114 million versus analysts’ $212.49 million estimate.

The price of Lenovo shares fell 3.7% in morning trade before the earnings results were released, compared with a 0.94% decline in the benchmark index (.HSI).

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