Lenovo, the world’s largest PC maker, reported a 67% fall in profit in its third quarter as the Chinese company faced macro-economic and currency instability as well as higher costs due to constraints on its supply of components.
Lenovo reported net income for the third quarter at $98m, missing by a wide margin a $145.9m median of analysts’ estimates compiled by Bloomberg.
Revenue for the three months to December decreased 6 per cent year on year to $12.2bn, but was above estimates of $11.7bn. While revenue at the company’s PC business was up 2 per cent at $8.5 billion, its mobile business saw revenue drop 23 per cent to $2.1bn as data centre revenue fell 20 per cent to $1bn.
PC shipments increased 2 per cent year-on-year during the third quarter to 15.7 million units, with commercial unit shipments up 5 per cent and notching double-digit growth in the gaming and detachable segments.
The company said it expects the issues it faced in the third quarter could persist in the fourth:
Looking forward, market conditions may remain challenging due to the uncertainties in the macroeconomic environment, while constraints in supplies of key components in the industry may increase costs and continue to bring challenges to the Group’s business environment.
Hong Kong-listed shares in the company were down 2.1 per cent in afternoon trading, while the benchmark Hang Seng index was up 0.4 per cent.