It makes four consecutive quarters that the world's largest
PC maker has suffered a sales decline and comes after Lenovo reported a 14
percent drop in annual profit for the year that ended in March, its first
annual decline since 2019.
Revenue in the April-June quarter fell to $12.9 billion,
below a $13.84 billion average of seven analyst estimates compiled by
Refinitiv.
Lenovo shares fell as much as 6 percent in Hong Kong after
the earnings release, compared with a 0.72 percent decline in the benchmark
index.
The COVID-19 pandemic gave a huge boost to electronics sales
as consumers and companies alike stocked up or upgraded to accommodate a shift
to remote work. However, revenue started contracting last year as demand began
to fall, weighed down by rising interest rates and soaring inflation.
The pace of the recovery remains weak and many retailers
still have unsold inventory, forcing PC makers and their suppliers including
chipmakers to adjust production volume and prices.
"The group's PC business is stabilizing and
well-positioned for a year-on-year recovery in the later part of 2023,"
Lenovo said in a statement.
Global PC shipments fell by 12 percent in the second quarter
of 2023, according to market research firm Canalys, a big improvement from a
more than 30 percent drop in the preceding two quarters.
To improve profit margins, Lenovo has been expanding non-PC
businesses such as servers and information technology (IT) services, but its
device business that includes PCs, smartphones and tablets still accounted for
nearly four-fifths of group revenue.
Net income attributable to shareholders tumbled 66 percent
to $177 million, versus analysts' $212.49 million estimate. © Reuters