China’s Lenovo Reports Steep 64% Decline in Quarterly Earnings

BEIJING: Lenovo, the biggest personal computer maker globally, disclosed on Thursday a disappointing 64 per cent drop in fourth-quarter profit, which it attributed primarily to a non-cash reduction in the value of warrants. Lenovo announced revenue of $16.98 billion for the quarter that concluded on March 31, surpassing analysts' predictions of $15.6 billion, according to LSEG data. The company's owners reported a net profit of $90 million, significantly below the average analyst expectation of $225.8 million, based on LSEG data.

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Lenovo introduced its initial AI-driven PCs in China last May and expanded globally in September. CEO Yang Yuanqing has estimated that AI PCs will make up 25 per cent of Lenovo's shipments by 2025, possibly hitting 80 per cent by 2027. The firm has incorporated technology from the Chinese startup DeepSeek, which has disrupted the AI industry with its affordable model, into its products, such as PCs and tablets. Lenovo's infrastructure solutions division, encompassing servers, experienced a 64 per cent rise in revenue during the March quarter compared to last year.

The solutions and services division, providing cloud-based software for corporate clients, announced $2.2 billion in revenue, a 22 per cent increase compared to the previous year. Lenovo's shares listed in Hong Kong fell by 2.08 per cent following the earnings announcement. They have declined by 1.69 per cent year to date.