Chinese computer giant Lenovo Group Ltd. posted its third straight on-year revenue drop on Wednesday as the company continued to see weaker demand for personal computers (PCs).
Lenovo stated that revenue for the fourth quarter ending March 31 fell 24% year-over-year to $12.63 billion from $15.30 billion generated in the same period a year ago.
The latest figure compared with the analysts’ expectations of $12.74 billion.
For fiscal 2022-2023, revenue of the Hong Kong-based firm was down 14% to $62 billion, the first annual slide since 2019.
Total net income attributable to shareholders was down 72% to $114 million in January-March from $412 million posted in the same period a year earlier.
Shares of Lenovo were trading 0.18% higher in after-hours trading on Wednesday in the US, while the stock shed 7.65% at home.
Lenovo Faces PC Demand Slump, Relies on Non-PC Businesses
Lenovo, the world’s largest PC maker, observed higher sales in electronics during the COVID-19 pandemic, as consumers and companies bought new equipment or upgraded their existing devices to properly adjust to a work-from-home setup.
However, the company’s revenue had begun shrinking in the previous year as demand faltered. Lenovo reported a 24% stumble in revenue for the three months ending December 31, marking its sharpest decline in 14 years.
Data from US-based International Data Corp. (IDC) showed that global PC shipments annually slipped 29% to 56.9 million units in the first quarter of this year, compared to the same period of pre-pandemic 2018 and 2019.
The Chinese tech giant has been working on bringing profit margins back up by stepping up its non-PC businesses, including smartphones, servers, and information technology (IT) services.
Lenovo said its non-PC ventures rose 7% in the full year through March 31 and now account for around 40% of overall revenue.
Furthermore, revenue in its services and solutions group (SSG) increased 22% year-over-year to $6.7 billion in the period, while its infrastructure solutions group (ISG) logged a 37% revenue surge to $9.8 billion.