Lenovo Q4 Profit, Revenues Down; Stock Dips

Shares of Lenovo Group Ltd. (LNVGY.PK) declined around 4 percent in Hong Kong trading as the Chinese PC and mobile maker reported Wednesday weak profit and revenues in its fourth quarter.

The fourth-quarter profit attributable to equity holders declined 72 percent to $114 million from last year’s $412 million.

Earnings per share were 0.93 US cents, down from 3.20 US cents a year ago.

In the fourth quarter, the company recognized a one-time restructuring and other charges of $249 million, among various other actions.

Adjusted profit attributable to equity holders was $284 million, compared to $507 million last year.

Revenue for the quarter declined 24 percent to $12.64 billion from $16.69 billion in the prior year.

In the full year, Group revenue was impacted due to the softness in the device market, while revenue from non-PC businesses reached a fiscal year high of nearly 40%, fueled by Lenovo’s diversified growth engines of Solutions and Services Group and Infrastructure Solutions Group.

Further, Lenovo said its Board of Directors declared a final dividend of 3.8 US cents or 30.0 HK cents per share for the fiscal year ended March 31, 2023.

Looking ahead, Lenovo sees positive signs of the market stabilizing after a year of industry and global uncertainties.

The company expects the entire PC and smart devices market to resume year-to-year growth in the second half of 2023, and for the IT services market to resume relatively high growth. Together, these
will drive the total IT market in 2023 back to moderate growth.

In the mid-to-long term, digital and intelligent transformation will continue to accelerate, leading to a big growth potential for cloud and computing infrastructure.

In Hong Kong, Lenovo shares were losing around 3.7 percent to trade at HK$7.55.

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