China’s Lenovo posts 65% rise in Q2 profit, says chip shortage still challenging By Reuters

By Brenda Goh

SHANGHAI (Reuters) – China’s Lenovo Group (OTC:), the world’s greatest maker of non-public computer systems, mentioned {that a} international chip scarcity remained a problem even because it reported a 65% rise in second-quarter revenue on Thursday.

The corporate mentioned it was capable of outgrow the market by securing extra provide of elements than its friends, however acknowledged that the chip scarcity was “inflicting delays so as fulfilment and vital back-log orders throughout PCs, smartphones, and servers.”

Shares within the firm fell 5% after its outcomes which Guotai Junan analyst Gin Yu mentioned mirrored market considerations over how the semiconductor scarcity, which has impacted items from vehicles to dwelling home equipment, was affecting worldwide PC shipments.

Analysis consultancy Gartner (NYSE:) mentioned final month that development in worldwide PC shipments slowed within the September quarter as easing anti-virus measures prompted shopper and academic spending to maneuver away from PCs to different priorities and as chip shortages constrained laptop computer shipments.

Lenovo retained the title of largest worldwide PC vendor by shipments, although its development slowed after 5 consecutive quarters of double digit development, Gartner mentioned. Within the third quarter, Lenovo’s international market share grew 1.8% to 23.7%.

On Thursday, it reported revenue for the quarter ended Sept. 30 attributable to fairness holders jumped to $512 million versus $310 million in the identical interval a 12 months earlier, however the 65% development fee was its slowest prior to now three quarters.

Income rose 23% to $17.9 billion, barely above a median estimate of $17.3 billion from 9 analysts, in response to Refinitiv knowledge.

The corporate mentioned that it noticed robust gross sales development in China and America, however a decline elsewhere within the Asia Pacific because of fewer academic offers in Japan. It added that it anticipated PC demand to be consistent with business assessments of 340-355 million a 12 months for the following few years.

Chairman Yang Yuanqing mentioned in a press release that the corporate had elevated its analysis and improvement (R&D) funding by 60% throughout the quarter and that its objective of doubling R&D spending over three years remained.

The corporate’s R&D expenditure has lately come underneath scrutiny in Chinese language media after it abruptly withdrew its utility for a ten billion yuan ($1.55 billion) share itemizing in Shanghai, days after it had been accepted by Shanghai’s STAR Market.