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Lenovo Group, the world’s largest maker of non-public computer systems, reported flat income for the April to June quarter when many Chinese language cities had been hit by COVID-19 lockdowns, marking its most subdued end in eight quarters.
Complete income through the interval was $16.96 billion (roughly Rs. 1,34,800 crore), up 0.2 p.c from the identical quarter a yr in the past although it was in step with a mean Refinitiv estimate of $16.87 billion (roughly Rs. 1,34,080 crore) drawn from seven analysts. That was the smallest quarter-on-quarter enhance because the interval ending in March 2020.
Nonetheless, Lenovo has made massive strides in increasing into different higher-margin companies akin to server operation, info expertise companies and cell gadgets, with Lenovo’s non-PC enterprise now accounting for 37 p.c of the corporate’s income. For the quarter, internet revenue attributable to shareholders rose 11 p.c to $516 million (roughly Rs. 4,100 crore).
Yang Yuanqing, Lenovo’s chairman and chief govt, mentioned the corporate is “diversifying from a pure PC enterprise to an organization that provides a broad vary of clever merchandise and options.”
Lockdowns in China through the quarter dealt a blow to the PC provide chain, with main laptop computer manufacturing companions together with Quanta, Compal, and Wistron struggling important manufacturing disruptions, in line with a report by analysis agency Counterpoint. It additionally coincided with the worldwide PC business coming off the pandemic-fuelled gross sales growth and the battle in Ukraine, prompting a number of firms from chipmakers to electronics producers akin to Intel and Samsung to warn of a pointy slowdown in demand.
World shipments fell 11.1 p.c up to now quarter from a yr earlier, the biggest year-over-year decline because the second quarter of 2013, in line with Counterpoint. Counterpoint mentioned Lenovo’s whole PC shipments fell 12.7 p.c to 17.4 million models largely resulting from weak client demand. Nonetheless, Lenovo maintained its management within the international PC market with a 24.4 p.c share.
Yang mentioned that he expects this yr’s international PC shipments to be between 300 million models and 310 million models. That might be a close to 10 p.c dip from the determine of 341 million models shipped final yr reported by knowledge agency Canalys.
However Yang mentioned that offer chain shortages, which plagued many {hardware} producers earlier this yr, have improved.
“In some areas we’re nonetheless going through a scarcity, notably within the knowledge middle enterprise,” he mentioned, “However typically talking, I am not seeing important challenges within the second half of this yr.”
He additionally added that Lenovo has seen some worth will increase within the semiconductor business however the firm would stay versatile in coping with worth fluctuations round elements.
Lenovo declined to touch upon gross sales in Russia and the affect the battle in Ukraine has had on its enterprise through the quarter.
Chinese language media reported final month that Lenovo has listed job posts to rent autonomous driving engineers. Yang declined to remark the corporate’s foray into the mobility enterprise.
Lenovo’s shares on the Hong Kong Inventory Change had been down 0.3 p.c at HKD 7.03 (roughly Rs. 70) whereas the broader Grasp Seng was down 1.9 p.c.
© Thomson Reuters 2022
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