HONG KONG – Oh boy, China’s Lenovo? Not the best day at the office for them. Yesterday, they unveiled some, well, less-than-stellar numbers. Their revenue took a whopping 24% nosedive between April and June, all thanks to folks not being as crazy about PCs anymore.
Here’s a zinger: they’ve been swimming against the tide for four straight quarters now, watching those sales dip and dip. In fact, if you peeked at their annual report, you’d see they took a 14% hit last year. Their first stumble since 2019. Ouch.
Now, for the nitty-gritty: they made $12.9 billion this quarter, which might sound like a lot (and don’t get me wrong, it is). But the brainy analysts out there pegged it at a cool $13.84 billion. You can imagine the disappointment.
Their stock? Well, it plunged by 6% but clawed back a bit. At the end of the day, they were down 2.9%, even when everyone else went up a smidge by 0.9%.
Remember when the pandemic hit and everyone went bananas for electronics? Zoom meetings left and right, new gadgets flying off the shelves. Good times for Lenovo. But then, interest rates started creeping up, inflation went through the roof, and bam! Folks weren’t as keen on tech shopping.
Now, the shops are brimming with unsold PCs. Lenovo and its pals are scratching their heads, tweaking prices, and figuring out production. It’s a bit of a mess.
But hey, Lenovo’s got hope. They piped up, saying, “We’re eyeing a bounce back in late 2023.” Fingers crossed for them, huh?
Interestingly, the global PC scene saw a 12% slump this quarter. Sounds bad, right? But hey, it’s way better than the 30% pitfall from before. So, there’s that.
Lenovo’s home turf, China? Not their biggest fan lately. Their sales tanked by 29% this quarter. Even after the big ol’ pandemic lockdown lifted, the economy’s been dragging its feet.
However, Lenovo’s big boss, Yang Yuanqing, is ever the optimist. He believes in the long game for China and is pretty chuffed about the government’s latest moves.
Their net income? It shriveled down by 66%, landing at $177 million, which is a tad shy of what the analysts guessed.
To make ends meet, Lenovo’s branching out. They’re dabbling in servers, IT services, and the like. But, let’s be real, PCs and gadgets are their bread and butter, making up a solid 80% of their income.
But here’s a curveball: Lenovo’s side gig in selling servers saw an 8% drop. Why, you ask? Yang pointed the finger at the scarce AI chips.
He lamented, “Everyone’s jumping on the AI train, but we’re short on the good stuff – those GPUs.”
Let’s see where the winds take them next!
