China's Lenovo Group on Wednesday reported a 24 percent 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 (roughly Rs. 1,04,497 crore), down 24 percent 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 (roughly Rs. 1,05,447 crore) average of eight analyst estimates compiled by Refinitiv.
For the full year through March, revenue shrank 14 percent, 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 percent, its steepest in 14 years.
Global PC shipments across the industry declined 29 percent 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 percent and now make up about 40 percent of total revenue.
Overall net income attributable to shareholders in January-March fell 72 percent to $114 million (roughly Rs. 943 crore) versus analysts' $212.49 million (roughly Rs. 1,758 crore) estimate.
The price of Lenovo shares fell 3.7 percent in morning trade before the earnings results were released, compared with a 0.94 percent decline in the benchmark index.
© Thomson Reuters 2023
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