Lenovo reports 64% profit decline in fourth quarter

[BEIJING] China’s Lenovo, the world’s largest personal computer manufacturer, on Thursday reported a worse-than-expected 64 per cent fall in fourth-quarter profit, which it said was mostly due to a non-cash decline in the value of warrants.

Lenovo reported revenue of US$16.98 billion for the quarter ended March 31, which exceeded analysts’ expectations of US$15.6 billion, LSEG data showed.

Net profit to the company’s owners came in at US$90 million, well short of the average analyst estimate of US$225.8 million, according to LSEG data.

Lenovo launched its first AI-powered PCs in China last May and followed that with a global rollout in September. CEO Yang Yuanqing has projected that AI PCs will account for a quarter of Lenovo’s shipments by 2025, potentially reaching 80 per cent by 2027.

The company has integrated technology from Chinese startup DeepSeek - which has upended the AI sector with its low-cost model - into its devices, including PCs and tablets.

Lenovo’s infrastructure solutions group, which includes servers, posted a 64 per cent revenue increase in the March quarter compared with the previous year.

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The solutions and services group, which offers cloud-based software for enterprise clients, reported US$2.2 billion in revenue, up 22 per cent from a year earlier.

Lenovo’s Hong Kong-listed shares dropped 2.08 per cent after the earnings release. They have dipped 1.69 per cent for the year to date. REUTERS