Hybrid work trend drives PC maker Lenovo’s Q3 profit to record high
SHANGHAI, Feb 23 (Reuters) – Third-quarter profit jumped 62% to an all-time high of $640 million at China’s Lenovo Group (0992.HK), the world’s biggest maker of personal computers said on Wednesday, as the growing popularity of hybrid work arrangements boosts demand for PCs.
Revenue for the quarter ended Dec. 31 rose 17% to $20.1 billion, also a record and ahead of an average estimate of $18.4 billion from 10 analysts, according to Refinitiv data.
Lenovo said worldwide demand for commercial PCs, excluding the Chromebook, in the quarter increased at the third-highest rate of growth since 1998. Customers were buying more premium, portable and high-quality PCs due to the growing prominence of remote working.
“The hybrid work situation will continue even after the pandemic and more and more companies have announced they will have a hybrid working model,” CEO and Chairman Yang Yuanqing told Reuters.
“That will help drive PC demand at least to keep current levels of around 340-350 million (a year),” he added, referring to a forecast consultancy IDC has made for demand through the years 2022-2025.
While a global shortage of semiconductors, which has affected various industries including automakers, remained a business challenge, there were signs of easing, particularly for the second half of the year, he said.
Lenovo also said that it was on track to deliver its medium-term target of doubling its net income margin.
Lenovo is the world’s largest PC maker, having captured a 24.6% market share of worldwide PC shipments in the fourth quarter of 2021, followed by HP Inc (HPE.N) and Dell (DELL.N), according to consultancy Gartner.
Lenovo had last year applied for a 10 billion yuan ($1.56 billion) share listing in Shanghai but abruptly withdrew it days after the application was accepted by Shanghai’s STAR market. Yang said it had currently no plans to resubmit the application.
Reporting by Brenda Goh; Editing by Himani Sarkar, Richard Pullin and Louise Heavens