Lenovo’s first quarter profit more than doubled and exceeded expectations

SHANGHAI, Aug.11 (Reuters) – China’s Lenovo Group Ltd (0992.HK), the world’s largest personal computer maker, reported a better-than-expected increase in first-quarter earnings on Wednesday as restrictions on the COVID-19 continued to stimulate work-at-home demand.

Profit for the quarter ended June 30 rose 119% to $ 466 million, from $ 213 million in the same quarter last year, and above an average estimate of $ 345.23 million of six analysts, according to data from Refinitiv.

Revenue rose 27% to $ 16.9 billion from $ 13.3 billion a year earlier. Analysts were forecasting sales of $ 16 billion.

Lenovo said a recovery in IT spending is bolstering demand and supporting higher average selling prices for its products, and it expected the total size of the personal computer market to continue to grow over the next five years.

“The accelerated digital and intelligent transformation has created significant market opportunities globally,” Lenovo Chairman and CEO Yuanqing Yang said in a statement.

“In the future, we will continue to increase investments in R&D, with the aim of doubling them over the next three years. “

These are the first results published by the company since it reorganized its business groups in February.

Analysts say consumer demand for PCs from a pandemic is starting to slow, but shortages of components like chips, driven by stronger-than-expected global demand for PCs, tablets and electronic cars, remain a problem. industry concern.

Global personal computer shipments increased 13% year-on-year to 82.3 million units in the second quarter of 2021, with desktop computer shipments increasing for the first time since the fourth quarter of 2019, the research firm Canalys in a report last month.

Lenovo extended its lead in the industry, shipping more than 20 million units for the third consecutive quarter to gain 24.4% market share, versus HP Inc (HPQ.N) with 22.6% and Dell with 17%, Canalys said.

Reporting by Brenda Goh; Editing by Christopher Cushing and Jane Wardell

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