Lenovo Group's First-Quarter Profit Declined 66%

By Sherry Qin

Lenovo Group's net profit fell 66% in its first quarter, weighed by its business in intelligent devices and infrastructure solutions.

Net profit for the three months ended June was $177 million, the world's largest PC maker said Thursday. That compared with a profit of $516 million a year earlier, the company said.

Revenue fell 24% to $12.90 billion, as sales of its main products--PCs, smartphones and other device--fell 28%. The company cited a sector-wide challenge of clearing inventories for the decline. Its efforts to draw down excess channel inventory has laid a foundation for future sales growth, it added.

Lenovo's infrastructure-solutions segment also weighed on results, declining 8% on year to $1.91 billion. The company attributed the decline to demand softness in servers, as well as the industry's slower-than-expected transition to the next-generation platform.

Lenovo's China revenue fell 29% on year due to lower demand in its PC and infrastructure businesses.

The company said its PC business is stabilizing and well-positioned for an on-year recovery later this year. The company plans to make further investments to tap opportunities in Non-PC areas, including fast-growing accessories and work-collaboration solutions. It is seeing greater opportunities in AI-related applications and will leverage its expertise in smart devices to provide more intelligent experiences, it added.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

August 17, 2023 00:50 ET (04:50 GMT)

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