Lenovo’s revenues made their third consecutive quarterly fall to $62 billion — down 14 per cent from $71 billion in 2022.
Net income came in at $1.6 billion was down from $2 billion– a 21 per cent drop.
The Chinese tech giant said its intelligent devices group (IDG) business saw a 21 per cent revenue setback due to a bad case of “sector inventory digestion” demand slowdown and exchange rate fluctuations.
IDG revenue dropped from $62 billion to $49 billion in 2023.
Lenovo said profitability was stable with gross margin and operating margin both delivering “18-year highs”.
Revenue from non-PC businesses reached a fiscal year high of nearly 40 per cent, fuelled by Lenovo’s diversified growth engines of solutions and services group (SSG) and infrastructure solutions group (ISG) growing revenue to $6.7 billion and $9.8 billion respectively, up 22 per cent and 37 per cent year-on-year.
However Lenovo claims it’s seeing the green shoots of recovery and signs of the market stabilising.
The vendor 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 Lenovo claims these will drive the total IT market in 2023 back to moderate growth.
Lenovo said its cash position “remained strong”, and its cash conversion cycle has “further improved”.
Lenovo chairman and CEO Yuanqing Yang said the company delivered stable profitability in the last fiscal year as its “diversified growth engines continue to hit new milestones.”
This sounds like a worry because you have to be going off the road to hit milestones with your growth engines, but management metaphors have not been our strong point.
“Their momentum is driving steady progress in our services-led transformation, and our non-PC businesses’ revenue mix increased to nearly 40 per cent. Our clear strategy is working, and our operation is resilient, even in the face of global uncertainties,” he said.
