The largest personal computer manufacturer in the world, Lenovo Group, reported flat sales for the April to June quarter, which coincided with the COVID-19 lockdowns that affected several Chinese cities. This was the company's most lacklustre performance in eight quarters.
Although it was in line with the average Refinitiv projection of $16.87 billion (approximately Rs. 1,34,080 crore) derived from seven experts, the total revenue during the period was $16.96 billion (about Rs. 1,34,800 crore), up 0.2 percent from the same quarter a year ago. Since the quarter that ended in March 2020, that growth from quarter to quarter was the least.
However, Lenovo has made significant progress in diversifying into other, higher-margin industries including server running, IT services, and mobile devices, with Lenovo's non-PC sector currently accounting for 37% of the company's total revenue. revenue. For the quarter, net income attributable to shareholders rose 11 percent to $516 million (roughly Rs. 4,100 crore).
The company is "diversifying from a pure PC industry to a company that offers a broad variety of intelligent goods and solutions," according to Yang Yuanqing, chairman and chief executive of Lenovo.
According to a report by the research firm Counterpoint, lockdowns in China during the quarter caused significant manufacturing disruptions for major laptop manufacturing partners Quanta, Compal, and Wistron. In addition, the war in Ukraine and the worldwide PC industry's recovery from the pandemic coincided, which spurred a number of businesses, including chipmakers and electronics producers like Intel and Samsung, to issue warnings about a dramatic drop in demand.
Global exports dropped 11.1 percent in the most recent quarter compared to a year earlier, the biggest drop since the second quarter of 2013, according to Counterpoint. Counterpoint said Lenovo's total PC shipments fell 12.7 percent to 17.4 million units largely due to weak consumer demand. However, Lenovo maintained its leadership in the global PC market with a 24.4 percent share.
revenue. For the quarter, net income attributable to shareholders rose 11 percent to $516 million (roughly Rs. 4,100 crore).
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Yang Yuanqing, Lenovo's chairman and chief executive, said the company is "diversifying from a pure PC business to a company that offers a broad range of intelligent products and solutions."
Lockdowns in China during the quarter dealt a blow to the PC supply chain, with major laptop manufacturing partners including Quanta, Compal, and Wistron suffering significant manufacturing disruptions, according to a report by research firm Counterpoint. It also coincided with the global PC industry coming off the pandemic-fuelled sales boom and the war in Ukraine, prompting several companies from chipmakers to electronics manufacturers such as Intel and Samsung to warn of a sharp slowdown in demand.
Global shipments fell 11.1 percent in the past quarter from a year earlier, the largest year-over-year decline since the second quarter of 2013, according to Counterpoint. Counterpoint said Lenovo's total PC shipments fell 12.7 percent to 17.4 million units largely due to weak consumer demand. However, Lenovo maintained its leadership in the global PC market with a 24.4 percent share.
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Yang said that he expects this year's global PC shipments to be between 300 million units and 310 million units. That would be a near 10 percent dip from the figure of 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.
"In some areas we are still facing a shortage, particularly in the data center business," he said, "But generally speaking, I'm not seeing significant challenges in the second half of this year."
He also added that Lenovo has seen some price increases in the semiconductor industry but the company would remain flexible in dealing with price fluctuations around components.
Lenovo declined to comment on sales in Russia and the impact the war in Ukraine has had on its business during the quarter.
Chinese media reported last month that Lenovo has listed job posts to hire autonomous driving engineers. Yang declined to comment the company's foray into the mobility business.
The largest personal computer manufacturer in the world, Lenovo Group, reported flat sales for the April to June quarter, which coincided with the COVID-19 lockdowns that affected several Chinese cities. This was the company's most lacklustre performance in eight quarters.
Although it was in line with the average Refinitiv projection of $16.87 billion (approximately Rs. 1,34,080 crore) derived from seven experts, the total revenue during the period was $16.96 billion (about Rs. 1,34,800 crore), up 0.2 percent from the same quarter a year ago. Since the quarter that ended in March 2020, that growth from quarter to quarter was the least.
However, Lenovo has made significant progress in diversifying into other, higher-margin industries including server running, IT services, and mobile devices, with Lenovo's non-PC sector currently accounting for 37% of the company's total revenue.Lenovo's shares on the Hong Kong Stock Exchange were down 0.3 percent at HKD 7.03 (roughly Rs. 70) while the broader Hang Seng was down 1.9 percent.
