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992 - Lenovo News Story

HK$4.86 0.2  3.2%

Last Trade - 9:08am

Sector
Technology
Size
Large Cap
Market Cap £5.58bn
Enterprise Value £7.88bn
Revenue £38.75bn
Position in Universe 231st / 5988

UPDATE 1-Lenovo warns of coronavirus challenges, Q3 profit beats expectations

Thu 20th February, 2020 4:53am
(Updates to add details of earnings, background)
    By Brenda Goh
    SHANGHAI, Feb 20 (Reuters) - Chinese personal computer maker
Lenovo Group  0992.HK  warned on Thursday it faced short-term
volatility and challenges from the coronavirus outbreak, as it
reported a better than expected quarterly profit and record
revenue.
    The world's largest PC maker is among companies facing
disruptions to their supply chain after local governments
extended a Lunar New Year holiday and imposed strict travel
curbs to limit the spread of the coronavirus.
    One of Lenovo's biggest factories is in the central city of
Wuhan, the epicentre of the outbreak, where businesses remain
shut, although its factories in the cities of Shenzhen and Hefei
resumed work on Feb. 10. 
    "The vast majority of the group's factories in China have
reopened and are operational on a limited basis, although its
suppliers and even logistics services across the countries
remained impacted," Lenovo said in a statement. 
    "Nevertheless, given its extensive global footprint, the
company is well positioned to address the supply challenges by
leveraging its strength as a global company with worldwide
manufacturing capabilities and supply chain efficiency."
    Shares of Apple  AAPL.O  and its suppliers dropped on
Tuesday after the iPhone maker warned sales will not meet
forecasts in the current quarter as the coronavirus outbreak was
pressuring its supply chain.  urn:newsml:reuters.com:*:nL1N2AH0QL
    Lenovo was given a respite after an early January trade
agreement between Washington and Beijing eased 18 months of
tensions.
    Laptop computers were among $156 billion worth of Chinese
goods that Washington had threatened to hit with tariffs in
December, along with cellphones and toys, which U.S. President
Donald Trump later decided not to implement.
    Lenovo said on Thursday net profit for the quarter ended
December rose 11% to $258 million thanks to strong demand for
its PCs and smart devices, beating an average $223 million
estimate of seven analysts, according to Refinitiv data.
    Revenue rose to $14.1 billion from $14 billion in the same
quarter last year, compared to an average $13.6 billion estimate
of 10 analysts.
    The global PC market grew 2.3% in the quarter to December,
as customers replaced machines to migrate to Windows 10, market
research firm Gartner said last month. Lenovo took a 24.8%
market share during the quarter, ahead of rivals HP Inc  HPQ.N 
and Dell, it said.
    Shares in Lenovo rose 2% by the midday break in Hong Kong on
Thursday before the results. The have risen 5.7% since the start
of the year but are still down more than a quarter from the
3-1/2-year high hit in April. 

 (Reporting by Brenda Goh; Editing by Kim Coghill
and Muralikumar Anantharaman)
 ((brenda.goh@thomsonreuters.com; +86 (0) 21 2083 0088; Reuters
Messaging: brenda.goh.thomsonreuters.com@reuters.net))
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