Lenovo profits sink 75% as PC demand continues nosedive
Chinese powerhouse Lenovo is feeling the burn as demand for personal computers continues to melt in a post-pandemic world.ended 31 March, down a brutal 24 percent year-on-year. Pre-tax profit was down 75 percent to $130 million on the back of workforce restructuring charges.
"By the end of this quarter or early next, the inventory digestion will come to an end so that the activation number and the shipment number will be more consistent," said Lenovo CEO Yanqing Yang. The Intelligent Devices Group – the PC and smart gadget division – was most devastated by shifting buying patterns: revenue fell to $9.79 billion versus $14.69 billion a year earlier, a 33.3 percent decline, and one that may mark a bottoming out of shipments.
The PC became the essential tool to work, learn, and play during the COVID-19 crisis. Manufacturers quickly sold out of stock within months and struggled to make enough to meet mounting orders.
"During the year under review, excess channel inventory intensified business challenges amid falling sell-in demand and currency headwinds. Sell-in activity was compromised by channel inventory clearance," said Lenovo in a statement.
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