Josh Yeh
HONG KONG (Reuters) – China’s Lenovo Group (OTC) reported a 9% rise in fourth-quarter revenue to $13.8 billion on Thursday as the world’s largest personal computer (PC) maker emerges from a demand slump caused by the fallout from COVID-19 . -19 pandemic.
Revenue for the January-March quarter beat the average estimate of $13 billion from eight analysts, LSEG said.
This marks Lenovo’s second straight quarter of revenue growth after the company suffered five straight quarters of revenue decline amid the downturn caused by the COVID-19 pandemic.
Last month, research firm IDC reported that the global PC market finally returned to growth in the first quarter of this year after nearly two years of decline.
According to IDC, PC shipments rose 1.5% year over year to 59.8 million units, with Lenovo firmly holding the top spot with a 23% market share.
But overall, Lenovo’s revenue for the year ended March 31 fell 8% to $56.9 billion, slightly beating analysts’ expectations of $56.19 billion.
Lenovo’s net income for the January-March quarter rose 118% to $248 million, beating analysts’ estimates of $162 million.
The company is also actively exploring opportunities in artificial intelligence (AI) as it continues to expand its non-PC businesses such as smartphones, servers and information technology services.
Service division revenue grew 8.5% in the quarter to $1.8 billion.
Lenovo shares rose 12% on Wednesday after the company unveiled two new AI-powered PCs, a new generation of computers designed to efficiently run artificial intelligence applications.
Morgan Stanley analysts said in a client note this week that Lenovo is likely to be one of the main beneficiaries of the AI-PC boom. While AI computers account for just under 5% of the market this year, by 2028 about 64% of new computers will be AI computers, they said.
As such, AI computers could generate up to 53% of Lenovo’s revenue by 2028, the highest among all PC makers, up from the current 2%, they added.
Lenovo shares fell 0.18% on Thursday ahead of the release of quarterly earnings.
(This story has been corrected to fix annual revenue at 56.9 billion in paragraph 6)