Image Source : China Visual

BEIJING, November 4 (TMTPOST) —Lenovo Group posted revenues of US$17.09 billion or a 4.36% year-on-year decline but its net profits went up 6% to reach US$541 million, according to its financial results for the second quarter of the fiscal year 2022/2023 ending September 30, 2022 or the third quarter of 2022 released on Thursday.

Lenovo saw its last single-quarter revenue decline in the first quarter of 2020 when the market was sluggish due to the spread of the pandemic around the world.

The company's CEO Yang Yuanqing said he was satisfied with the results, revenue growth of 3% year-on-year in the quarter excluding the impact of currency exchange rates.

Lenovo’s performance still beat market expectations. According to Bloomberg statistics, analysts previously expected the quarter's revenue and net profit of $16.9 billion and $473 million, respectively.

Lenovo's main businesses include the Intelligent Devices Group (IDG), which focuses on personal computers (PCs), tablets, and smartphones, as well as the Infrastructure Solutions Group (ISG), which focuses on providing infrastructure solutions, and the Solutions and Services Group (SSG), which was established in 2021 by integrating the service businesses.

In the third quarter, the IDG segment achieved revenue of $13.716 billion, down 10.58 percent year-over-year, and accounted for 75.98 percent of total revenue. Its business operating margin fell slightly to 7.43% from 7.59% a year earlier. Lenovo said this was mainly due to macroeconomic headwinds depressing overall demand in the PC segment, but there was a high single-digit increase in the average selling price of PCs.

In the post-earnings conference call, Liu Jun, Lenovo's Executive Vice President and President of the China geography, said he remained bullish on the PC market's medium-to-long-term growth. Currently, the number of PCs per 100 people in China is 18, while in Europe it is around 60 and in the U.S. it is over 100, so the Chinese PC market still has great growth potential. He also expected that the global PC market would ship 290 million units in 2023.