Keep knowledgeable with free updates
Merely signal as much as the Know-how sector myFT Digest — delivered on to your inbox.
Lenovo has reported its fifth consecutive quarter of declining revenues however mentioned it was seeing clear indicators of restoration within the expertise sector that will energy a return to progress for the world’s largest PC maker by shipments.
Regardless of macroeconomic headwinds that had brought about a hunch in demand, the PC market had “bottomed out”, mentioned chief government Yang Yuanqing throughout a Thursday name to debate September-quarter earnings.
The Chinese language firm’s Clever Gadgets Group, which incorporates PCs, tablets, and smartphones, was poised to “resume progress and profitability as quickly as attainable”, he added.
Chief monetary officer Wong Wai Ming mentioned Lenovo’s Infrastructure Options Group, which supplies storage, software program and companies for enterprise, had seen “sequential and sturdy enchancment, signalling momentum in demand restoration from a couple of difficult quarters”.
Lenovo has been battling a post-pandemic trade downturn. Within the second quarter, world PC shipments declined 7 per cent, in accordance with analysis agency Canalys. Nonetheless, the tempo of decline has slowed since a quarterly cargo decline of greater than 30 per cent in late 2022.
Within the three months ending in September, Lenovo’s web revenue plunged 54 per cent yr on yr to $249.2mn, which was a fourth consecutive fall in income, whereas revenues declined 16 per cent to $14.4bn in a fifth straight drop.
Nonetheless, the corporate achieved a quarter-on-quarter enchancment for the second time in a row, indicating “an encouraging trajectory to restoration”, mentioned Yang.
Lenovo can also be banking on the expansion alternative of the worldwide synthetic intelligence increase and unveiled a full AI product portfolio for shoppers and enterprise final month. Yang mentioned he believed that AI would turn out to be “a very powerful progress driver for infrastructure and options”.
The corporate plans to launch its first AI PC, a pc embedded with AI capabilities, within the second half of subsequent yr, which might assist drive a alternative cycle.
Lenovo additionally gives AI infrastructure merchandise, together with servers with superior chips from US firms equivalent to Nvidia. These are anticipated to be hit by the US tightening restrictions final month on high-performance chips being exported to China.
Yang mentioned the corporate was nonetheless speaking with the US authorities whereas assessing the influence of the newest chip measures.
Lenovo’s share worth is up practically 50 per cent this yr, propelled by a increase in demand for servers to coach AI and knowledge centre building.
The corporate has additionally been making an attempt to diversify from its core enterprise and gross sales from non-PC companies accounted for 40 per cent of group revenues within the September quarter, up 3 proportion factors yr on yr.