Lenovo posts another revenue decline as PC demand remains slow. As the supply of personal computers (PCs) continues to exceed the demand for them, China’s Lenovo Group Ltd. (0992. HK) reported on Thursday that its revenue for the three months that ended in September fell by 16%, which was in line with what the market was expecting.
This is the fifth consecutive quarter that the world’s largest PC maker has suffered a sales decrease as it continues to digest excess inventory amassed during the COVID-19 epidemic. Lenovo’s quarterly revenue declined 16% to $14.41 billion from the same period last year, marking the fifth consecutive quarter that the company has suffered a sales decline.
The outcome was contrasted to the $14.45 billion average calculated by LSEG from the projections of seven different analysts. Following a pandemic-induced boom for the electronics sector, Lenovo reported in May that its revenue had decreased by 14% for the year up to March. This was the company’s first annual dip since 2019.
The COVID-19 epidemic led to an increase in sales of both business and consumer gadgets worldwide due to the widespread use of remote work. Despite this, income has been decreasing since the previous year due to supply beginning to exceed demand.
The number of personal computers shipped globally during the second quarter of 2023 decreased by 7%, according to Canalys’ research. Late in 2017, quarterly shipping decreases exceeded 30%; however, the pace of reduction has reduced considerably in recent quarters.
Lenovo has been developing its non-PC industries, such as smartphone manufacturing, server manufacturing, and information technology (IT) service provisioning, to boost its profit margins.
Lenovo’s digital solution service division saw its sales increase by 14% during the first half of the company’s fiscal year, reaching a total of $3.6 billion.
The overall net income attributable to shareholders during the second fiscal quarter decreased by 60% to $249 million, compared to the forecast of $235 million that analysts provided.
Following the publication of the quarterly results report, the price of Lenovo shares dropped by 3.58%, compared to a decrease of 1.65% in the benchmark index (.HSI).
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