Lenovo Clocks Slowest Revenue Growth In 7 Quarters As Pandemic Demand Cools Down

  • Lenovo Group Ltd LNVGY reported fourth-quarter FY21/22 revenue growth of ~7% year-on-year to $16.69 billion, below the consensus of $17.36 billion.
  • SSG revenue grew 28% and improved its operating margin by more than 1 point Y/Y. 
  • ISG sustained its profitability. IDG improved its operating margin Y/Y.
  • It marked Lenovo's slowest growth in seven quarters, as people shopped for fewer of its personal computers during pandemic recovery, Reuters reports.
  • The sales have begun to lose steam as China, its biggest market, was hit by the Omicron variant, prompting many cities to impose lockdowns and shut factories.
  • Net income rose 58% Y/Y to $412 million, translating to EPS of $3.52. 
  • "Although last year was challenging for the world, with the accelerated global digital and intelligent transformation, Lenovo delivered a record year of profit and revenue," said Yuanqing Yang, Chair and CEO. "All our main businesses are now profitable for the full year, and our new growth engines – SSG, ISG, and Mobile – are showing strong momentum."
  • Lenovo's winning streak, boosted by the pandemic-fuelled buying of laptops and other personal gadgets, will likely cool this year as demand for PCs slows and market share gain becomes limited.
  • Price Action: LNVGY shares closed lower by 1.93% at $18.25 on Wednesday.
  • Photo Via Wikimedia Commons
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