China’s Lenovo extends income progress streak, beats expectations By Reuters

By Josh Ye

HONG KONG (Reuters) – China’s Lenovo Group (OTC:) reported a 9% rise in fourth-quarter income to $13.8 billion on Thursday, because the world’s largest maker of private computer systems (PCs) exits a requirement stoop following the aftermath of the COVID-19 pandemic.

Income for the January-March quarter beat a median estimate of $13 billion drawn from eight analysts, in accordance with LSEG information.

This marks a second consecutive quarter of income progress for Lenovo after it suffered 5 straight quarters of income declines amid the post-COVID slowdown.

Final month, analysis agency IDC mentioned the worldwide PC market has lastly returned to progress in the course of the first quarter this yr after struggling practically two years of decline.

PC shipments grew 1.5% yr over yr to 59.8 million in the course of the quarter, with Lenovo firmly holding on to the No.1 title with a 23% market share, in accordance with IDC.

However general, Lenovo’s income for the yr ended March 31 fell 8% to 56.9 billion, coming barely over analysts’ expectations of $56.19 billion.

Lenovo’s web revenue for the January-March quarter rose 118% to $248 million, beating analysts’ estimates of $162 million.

The corporate can also be actively exploring alternatives in synthetic intelligence (AI), whereas persevering with to broaden its non-PC enterprise, comparable to smartphones, servers and data expertise companies.

Income for its service enterprise unit rose 8.5% to $1.8 billion for the quarter.

Lenovo’s shares soared by 12% on Wednesday after it unveiled two new AI PCs, a brand new breed of computer systems configured to successfully run AI purposes.

Morgan Stanley analysts mentioned in a shopper be aware this week that Lenovo will possible be one of many predominant beneficiaries of the AI PC growth. Whereas AI PCs now account for simply lower than 5% of the market this yr, about 64% of latest PCs will likely be AI PCs by 2028, they mentioned.

As such, AI PCs can generate as much as 53% of income by 2028 for Lenovo, the best amongst all of the PC producers, in contrast with the present 2%, they added.

Lenovo’s shares fell 0.18% on Thursday, forward of the quarterly earnings launch.

(This story has been corrected to repair the annual income determine to 56.9 billion in paragraph 6)