Tech

Lenovo reports slowest revenue growth in 8 quarters with 0.2% gain


Lenovo Group, the world’s largest maker of personal computers, reported flat revenue for the April-June quarter as many Chinese cities were affected by the COVID-19 lockdown, hitting a… marks the lowest results in eight quarters.

Total revenue for the period was $16.96 billion (approximately Rs 1.34,800 crore), up 0.2% year-on-year though it was in line with Refinitiv’s average estimate of $16.87 billion la (approximately Rs 1,34,080 crore) drawn from seven analysts. That was the smallest quarterly increase since the period ended in March 2020.

However, Lenovo has made great strides in expanding into higher-margin businesses such as server operations, IT services, and mobile devices, with its non-PC business. Lenovo now accounts for 37% of the company’s revenue. During the quarter, net income attributable to shareholders increased 11% to $516 million (approximately Rs 4,100).

Yang Yuanqing, Lenovo’s president and chief executive officer, said the company is “diversifying from a pure PC business into a company that offers a wide range of smart products and solutions.”

The lockdowns in China during the quarter dealt a blow to the PC supply chain, with major laptop manufacturing partners including QuantaCompal and Wistron According to a report by research firm Counterpoint, there are significant production disruptions. It also coincided with the global PC industry escaping a sales boom caused by the pandemic and the war in Ukraine, spurring a number of companies from chipmakers to electronics makers like Intel and SAMSUNG to warn of a sharp drop in demand.

Global shipments fell 11.1% in the last quarter from a year earlier, the biggest year-on-year decline since Q2 2013, according to Counterpoint. Counterpoint said Lenovo’s total PC shipments fell 12.7% to 17.4 million units mainly due to weak consumer demand. However, Lenovo still retains the leading position in the global PC market with 24.4% market share.

Yang said he expects global PC shipments this year to reach between 300 million and 310 million units. That would be a drop of nearly 10% from the 341 million units shipped last year reported by data firm Canalys.

But Yang said that supply chain shortages, which plagued many hardware manufacturers earlier this year, have improved.

“We are still facing shortages in some areas, especially in the data center business, but overall, I don’t see significant challenges in the second half,” he said. this year”.

He also added that Lenovo has seen some price hikes in the semiconductor industry but the company will remain flexible in dealing with price fluctuations around components.

Lenovo declined to comment on sales in Russia and the impact of the war in Ukraine on its business for the quarter.

Chinese media reported last month that Lenovo had listed vacancies for autonomous driving engineers. Yang declined to comment on the company’s foray into the mobile business.

Shares of Lenovo on the Hong Kong Stock Exchange fell 0.3% at HKD 7.03 (about Rs 70) while the broader Hang Seng fell 1.9%.

© Thomson Reuters 2022




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