Lenovo Posts First Revenue Gain Since 2022

By Sherry Qin

Lenovo has posted its first revenue gain since 2022, snapping a run of five straight quarters of declines during which the world's largest PC maker battled a postpandemic downturn in demand for personal computers.

Revenue for the three months ended in December rose 3% from a year earlier to $15.72 billion, Lenovo said on Thursday. That marked its first on-year revenue increase in the last one-and-a-half years, beating analysts' expectations fro $15.26 billion taken from a FactSet poll. The company said the result was driven by its solutions and services business, which posted double-digit revenue growth.

Net profit for the fiscal third quarter declined to $337 million from $437 million over the period, which Lenovo attributed to a high base effect. However, the result represents a 35% sequential rise and beat expectations for a profit of $308 million in the FactSet poll.

Lenovo's intelligent devices business, which consists of PCs, tablets, smartphones and other devices, gained 7% in the fiscal third quarter on year.

The company said that in the long term, it expects the global PC sector to recover to a level structurally higher than in the prepandemic period. It flagged the commercial replacement cycle and the trend of premiumization as the most important catalysts for its PC growth.

Lenovo also said that it is "actively developing personalized AI solutions." The company's development of artificial intelligence-powered tech is being closely watched by investors.

"AI PCs represent an inflection point for the PC industry, driving a new product cycle with pricing premium," it added.

Lenovo said it also plans to boost investments in non-PC areas, including work-collaboration solutions.

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

(END) Dow Jones Newswires

February 21, 2024 23:59 ET (04:59 GMT)

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