Lenovo Group Ltd, the world’s largest PC maker, reported a 24% fall in revenue for the January-March quarter, meeting market expectations. The company’s revenue has now declined for three consecutive quarters as demand for personal computers (PCs) continues to slump.
For the full year through March, Lenovo’s revenue shrank 14%, 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%, its steepest in 14 years.
Global PC shipments across the industry declined 29% 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% and now make up about 40% of total revenue.
Overall net income attributable to shareholders in January-March fell 72% to $114 million versus analysts’ $212.49 million estimate.
The price of Lenovo shares fell 3.7% in morning trade before the earnings results were released, compared with a 0.94% decline in the benchmark index (.HSI).