Lenovo Sales Plunge 24%... Decline for 4 Consecutive Quarters

Q2 Earnings Announcement

Lenovo, China's largest personal computer (PC) company, has experienced a decline in sales for four consecutive quarters due to the downturn in the PC market.

On the 17th, Lenovo announced in its earnings report that its revenue for the second quarter (April to June) of this year was $12.9 billion (approximately 17.3 trillion KRW), down 24% compared to the same period last year. This figure fell short of the market expectation of $13.84 billion compiled by Refinitiv. Net profit also plunged 66% to $1.77 billion from $5.16 billion in the same period last year. Earnings per share stood at $1.48.

Lenovo's revenue decline, primarily driven by PC and tablet sales, stemmed from the global decrease in PC demand. The PC demand, which had surged during the COVID-19 pandemic due to the expansion of remote work, has cooled down, resulting in four consecutive quarters of declining sales. This marks the first time in four years since 2019 that Lenovo's quarterly revenue has decreased for four consecutive quarters.

According to market research firm Canalys, global PC shipments in the second quarter fell 12% compared to the same period last year. However, the rate of decline eased from 30% in the first quarter.

[Image source=Reuters Yonhap News]

Foreign media explained that "the worsening macroeconomic environment due to high inflation and high interest rates threatened the customer base of major corporate clients in the PC industry, which is the background for the deteriorating performance."

However, PC demand is expected to gradually recover from the second half of the year. Lenovo stated in its earnings release, "PC demand has passed the bottom and is gradually recovering," and "we expect the PC business to stabilize and resume growth in the second half of the year."

Lenovo also announced plans to invest in the artificial intelligence (AI) sector. The company stated, "We will focus on AI devices, AI infrastructure, and AI solutions, investing $1 billion over the next three years."

This content was produced with the assistance of AI translation services.