China's Lenovo reports flat revenue, weakest in eight quarters (updated)

Compal Electronics

10/08/2022 01:21

(Recasts and writes through)
    By Josh Ye
    HONG KONG, Aug 10 (Reuters) - Lenovo Group  0992.HK , the
world's biggest maker of personal computers, reported flat
revenue for the April-June quarter when many Chinese cities were
hit by COVID-19 lockdowns, marking its most subdued result in
eight quarters. 
    Total revenue came in at $16.96 billion, in line with an
average Refinitiv estimate of $16.87 billion drawn from seven
analysts. Net income attributable to shareholders rose 11% to
$516 million. 
    Lockdowns in China during the quarter dealt a blow to the PC
supply chain, with major laptop manufacturing partners including
Quanta  2382.TW , Compal  2324.TW  and Wistron  3231.TW 
suffering significant manufacturing disruptions, according to a
report by research firm Counterpoint. 
    It also coincided with the global PC industry coming off the
pandemic-fuelled sales boom and the war in Ukraine, prompting
several companies from chipmakers to electronics manufacturers
such as Intel  INTC.O  and Samsung  005930.KS  to warn of a
sharp slowdown in demand.  urn:newsml:reuters.com:*:nL4N2Z947R urn:newsml:reuters.com:*:nL1N2Z83N6
    Global shipments fell 11.1% in the past quarter from a year
earlier, the largest year-over-year decline since the second
quarter of 2013, according to Counterpoint. 
    Lenovo said in a statement that "the PC market is currently
experiencing short-term challenges."
    Counterpoint said Lenovo’s total PC shipments fell 12.7% to
17.4 million units largely due to weak consumer demand. However,
Lenovo maintained its leadership in the global PC market with a
24.4% share.
    But strong demand from companies to upgrade their digital
capability has fuelled growth in Lenovo’s server and other
non-PC business. The company reported 37% revenue growth in its
non-PC business during the quarter. 

 (Reporting by Josh Ye; Editing By Tom Hogue and Edwina Gibbs)
 ((Josh.Ye@thomsonreuters.com;))