Lenovo reported 23% decline in its net profit
2024.02.21 23:59
Lenovo reported 23% decline in its net profit
Budrigannews.com – PC giant Lenovo Group faced a challenging December quarter, marked by a sharp 23% decline in net profit to $337 million. The company attributed this downturn to weakening demand for smartphones and other devices, despite a 3% increase in quarterly revenue to $15.72 billion. Increased costs largely offset the revenue growth, resulting in a profit squeeze.
While Lenovo’s infrastructure solutions group (ISG), which offers corporate server and cloud services, experienced an operating loss during the quarter, the company remains optimistic about the unit’s prospects, citing the potential of artificial intelligence (AI). Lenovo believes that AI holds the key to driving sustained recovery in enterprise demand for technology.
The company’s Generative AI products, part of its business group, have already begun positively impacting ISG’s growth trajectory. Lenovo attributes the operating loss in ISG primarily to increased investments in developing new products.
The company’s intelligent devices group, which encompasses its flagship PCs, mobile phones, and other devices, remained the largest revenue earner. It achieved a modest year-on-year increase in revenue and profit, indicating some recovery in device sales after a prolonged period of decline. Lenovo’s efforts to integrate AI into its devices, including the recent unveiling of AI integrations for upcoming product lines, may further contribute to this recovery.
Despite these positive developments, Lenovo’s shares experienced a 0.6% decline in Hong Kong trade. Investors remain cautious amid concerns over the broader economic outlook and the company’s ability to fully capitalize on AI’s potential.
