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Poor PC demand weighs down Lenovo revenues

Lenovo reported a worse-than-expected 24 percent decline in its revenue from April to June.

Revenues hit by a decline in global PC demand

In a report by Reuters, Lenovo said its revenues in the April-June quarter fell to USD 12.9 billion (around PHP 730 billion), below the USD 13.84 billion (around PHP 784 billion) average of seven analyst estimates compiled by Refinitiv.

Lenovo associated the decline with a prolonged slump in global demand for personal computers.

This is already the fourth consecutive quarter that Lenovo suffered a decline in sales. It even logged a 14 percent drop in annual profit for the year that ended in March, its first annual decline since 2019.

The COVID-19 pandemic gave a huge boost to electronics sales as consumers and companies shifted to remote work. However, revenue started falling last year as demand also began to fall, weighed down by rising interest rates and soaring inflation.

Recovery is still weak and many retailers still have unsold inventory. This led many PC manufacturers and their suppliers including chipmakers to adjust production volume and prices.

In a statement, Lenovo said its "PC business is stabilizing and well-positioned for a year-on-year recovery in the later part of 2023."

To improve profit margins, the company has been expanding non-PC businesses such as servers and information technology (IT) services. However, its device business, which includes PCs, smartphones, and tablets, still accounted for nearly four-fifths of group revenue.

Lenovo also logged a net income attributable to shareholders of USD 177 million, lower than the USD 212.49 million estimate by analysts.

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Via: Reuters

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