"Due to the macro economic headwinds, the shortage is
weighing significantly in the very short term," Luca Rossi, executive vice
president of Lenovo, told a post-earnings call.
"Specifically in this quarter, the manufacturing
shutdowns will impact the total shipments in basically everywhere, particularly
in the People's Republic of China," he said, adding that demand was also
being curbed by geopolitical tensions and inflationary pressure.
Lenovo's CFO Wai Ming Wong said the company's Shenzhen
factory operations were impacted during the quarter. The south China city
imposed a one-week lockdown in March and conducted multiple rounds of testing
after a jump in COVID cases.
The company said it was seeing some easing in supply
shortages for the PC segment, but said its smartphone and data centre
businesses were still under heavy pressure.
A bellwether for the global PC market, the Beijing-based
company led the market with a 23.1% share in the January-March period,
according to data from research firm Counterpoint.
A rush to buy PCs to work at home during the pandemic
culminated in record sales and profit for Lenovo in the December quarter. But
sales have begun to lose steam as China, the company's biggest market, has been
hit by the Omicron variant, keeping consumers at home and shutting factories.
The company's revenue rose to $16.69 billion in the quarter
ended March 31 from $15.63 billion a year earlier, below an average estimate of
$17.36 billion from 9 analysts, according to Refinitiv. That amounted a 6.8%
year-on-year rise, its slowest growth in seven quarters.
However, profit attributable to shareholders jumped to $412
million, exceeding analysts' expectations.
Lenovo also reported the annual result for its fiscal year
ending in March. Revenue rose 18% to $71.6 billion and profit jumped 72% to $2
billion, the highest levels for both since the company went public in 1994.
Counterpoint reported in April that global PC shipments fell
4.3% in the first quarter of 2022, as the war in Ukraine and China's lockdowns
pressured already fragile supply chains and added to shortages of components. -Reuters