🎈 Up Big Today: Find today's biggest gainers with our free screenerTry Stock Screener

Lenovo Weathers China Slowdown With 11% Jump in Qtrly Profit

Published 10-08-2022, 05:42 am
GOOGL
-
AAPL
-
0992
-
LNVGF
-
GOOG
-
0992
-

By Ambar Warrick 

Investing.com-- Electronic devices maker Lenovo Group (HK:0992) posted a higher-than-expected quarterly profit on Wednesday as strong smartphone sales and a better international presence helped offset a COVID-led slowdown in its largest market, China. 

Net profit attributable to shareholders for the three months to Jun 30, 2022, rose 11% to $516 million, or 4.39 cents a share, Lenovo said in a filing. This beat expectations for earnings of 3.89 cents.

Quarterly revenue came in flat at $16.96 billion, largely in line with estimates. 

Lenovo saw improved margins as stronger smartphone sales and infrastructure services helped offset a decline in its key personal computer (PC) business. 

The company attributed this decline to a series of COVID-19 lockdowns in China. But strength in its international markets- particularly the Americas and Europe, Middle East and Africa region kept sales, and its margins buoyant. 

Lenovo holds a roughly 3% share of the global smartphone market, helped primarily by its mid-range offerings under the Motorola brand, which it acquired from Google (NASDAQ:GOOGL) in 2014.

But the company is looking to expand beyond just offering devices. Its software infrastructure segment logged a 14% jump in revenue this quarter, supported by growing demand for enterprise software as more companies shift to hybrid work models. 

This, coupled with a 12% jump in non-PC sales, were the main drivers behind Lenovo’s strong results. The company forecast steady demand for its infrastructure offerings, and also expects PC and smartphone sales to pick up in the second half of 2022. 

A series of COVID-19 lockdowns in China this year have battered technology majors that depend on the country for a bulk of their sales. Chip shortages have also dented supply chains for device makers, making it difficult for them to meet growing demand. 

But easing lockdowns towards the end of June helped spur a late-quarter recovery. iPhone maker Apple Inc (NASDAQ:AAPL) also logged steady sales in China for the June quarter.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.