Lenovo third-quarter net profit falls 67 percent, blames weak macroeconomic environment

Reuters News
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Posted: Feb 15, 2017 11:19 PM

By Sijia Jiang

HONG KONG (Reuters) - Lenovo Group Ltd <0992.HK>, the world's largest personal computer (PC) maker, on Thursday posted a 67 percent slide in third-quarter net profit, lagging analyst estimates, as supply constraints and a weak macroeconomic environment weighed.

Profit fell to $98 million over the three months through December, from $300 million in the same period a year earlier. That compared with the $159.53 million average of 14 analyst estimates in a Thomson Reuters poll.

Revenue fell 6 percent to $12.2 billion.

Component supply constraints across the industries in which Lenovo operates impacted performance, in addition to a challenging macro environment and global markets, the company said in a filing.

The results come as PC makers continue to battle against tablets and smartphones which for many consumers have become the primary devices for internet access and casual computing. Global PC shipments fell for a fifth consecutive year in 2016, by 6.2 percent, showed data from researcher Gartner.

Nevertheless, Lenovo saw its core PC business book 2 percent revenue growth to $8.6 billion, reversing a seven-quarter downward trend. Shipments rose 2 percent to 15.7 million units, helped by a 5 percent rise in commercial PCs.

Shipments in its mobile phone unit fell 26 percent, though that represented improvement since the first quarter.

Lenovo's share price has risen over 10 percent this year, in line with gains in the Hang Seng index <.HSI>. The stock ended morning trade down 2.1 percent, versus the benchmark's 0.4 percent rise.

(Reporting by Sijia Jiang; Editing by Christopher Cushing)