Lenovo profit beats expectations,helped by remote working trend
"It is continuing to benefit from “new normal” remote working after COVID-19."
China’s Lenovo Group, the world’s biggest PC maker, posted a better-than-expected quarterly profit on Tuesday and said it is continuing to benefit from “new normal” remote working after COVID-19. The Chinese giant said it set new records for group revenue, pre-tax income, and net income, and all three key business groups delivered year-on-year growth for the first time in six quarters.
“Last quarter was what I would call a perfect quarter for Lenovo,” Chairman Yang Yuanqing told Reuters in a post-results interview. “I hope the current quarter could be even better,” he said.
Lenovo reported a 53% jump in net profit for the quarter ended September to $310 million, beating the average analyst estimate of $224 million, according to Refinitiv data. Revenue increased by 7% to $14.5 billion.
With the pandemic forcing companies worldwide to seek work-from-home options and people preferring to stay indoors, the company expects to benefit from increased sales of PCs and tablets. “Our gaming PCs and our thin-and-light PCs actually grow margin faster than other products,” said Yang.
According to research firm Gartner, worldwide shipments of personal computers rose 3.6% in the July-September quarter, due to home entertainment and distance learning needs, along with the strongest growth the U.S. PC market has seen in 10 years. Yang predicted a further 5% to 10% industry-wide increase in the total addressable market for PCs next year.
Lenovo strengthened its lead in PCs with 25.7% of the market, ahead of HP Inc and Dell Technologies which had 21.6% and 15.2% share, respectively. “The issue is not demand, it supplies. If we can fill enough supply, we can sell more products,” he said. Yang said a component supply shortage, particularly for display and integrated circuit, is keeping the company from meeting 100% customer demand.
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