Stefan Mileschin

Slump in profits but could have been worse

Lenovo reported a slump in fourth quarter profit due to disruptions caused by the coronavirus crisis, although the result was far better than the cocaine nose jobs of Wall Street expected.

Lenovo Chairman, Yang Yuanqing, said production was back on track. He expected to see year-on-year revenue growth this quarter for its PC and smart devices business and its data centre business as more people work from home permanently.

He told a separate briefing the company estimates that in two to three years, the total addressable market for PCs industry-wide may have increased by 25 percent to 30 percent.

Net profit tumbled 64 percent in January-March to $43 million but was ahead of a Refinitiv consensus estimate of $7.5 million. Revenue slid 9.7 percent to $10.6 billion.

The stronger than expected results lifted Lenovo shares, which were up five percent in Wednesday afternoon trade.

Lenovo had to shut down factories, including a big plant in Wuhan, the epicentre of China’s outbreak, due to measures to contain the virus. At some points, the company had, in extreme cases, needed to share staff with other firms and send office employees to work on assembly lines when production workers were in quarantine.

“We have resumed 100 percent production in China although some components were still in short supply”, Yang said.

https://fudzilla.com/news/pc-hardwar...-than-expected