Lenovo Group reported a significant setback in its financial performance for the third quarter ending September, with a 16 per cent fall in revenue totaling USD 14.41 billion compared to the same period last year.
This is the fifth consecutive quarter of declining sales for the company, as it grapples with the lingering effects of excess inventory accumulated during the COVID-19 pandemic.
The persistent imbalance between supply and demand in the personal computer (PC) market has been a primary factor in Lenovo’s revenue woes. The company has struggled to recover from the pandemic-induced surge in demand for electronics, which propelled both enterprise and personal electronics sales as the world transitioned to remote work. However, the recent quarter’s results indicate that the market dynamics have shifted, leading to a contraction in demand for PCs.
While the worldwide PC market faced a 7 per cent decline in shipments during the second quarter of 2023, Lenovo’s challenges extend beyond the PC sector. To counter the impact of the sales slump in PCs, Lenovo has been diversifying its business, expanding into non-PC segments such as smartphones, servers, and information technology (IT) services.
During the first half of its fiscal year, Lenovo saw a 14 per cent increase in revenue from its digital solution service business, which reached USD 3.6 billion. Despite these efforts, the company’s overall net income attributable to shareholders plummeted by 60 per cent in the second fiscal quarter, amounting to USD 249 million—falling short of analysts’ expectations.
