Lenovo Group, based in China, reported on Thursday that its revenue for the fourth quarter increased by 9% to $13.8 billion. As the world's largest personal computer (PC) manufacturer, Lenovo is emerging from the impact of sluggish demand following the COVID-19 pandemic.
According to LSEG data, revenue for the January to March quarter exceeded the average estimate of $13 billion by eight analysts.
This marks Lenovo's second consecutive quarter of revenue growth after five quarters of post-pandemic declines.
Last month, research firm IDC indicated that the global PC market finally returned to growth in the first quarter of this year after nearly two years of decline.
According to IDC, PC shipments increased by 1.5% year-on-year, reaching 59.8 million units, with Lenovo maintaining its lead with a 23% market share.
However, annual revenue, as of March 31, declined by 8% to $56.9 billion, slightly above analysts' expectations of $56.19 billion.
Net profit for the January to March quarter grew by 118%, reaching $248 million, surpassing analysts' expectations of $162 million.
The company is also actively exploring opportunities in the field of artificial intelligence (AI) while continuing to expand its non-PC businesses such as smartphones, servers, and information technology services.
Revenue from the services business unit grew by 8.5% in the quarter, reaching $1.8 billion.
Lenovo's stock price surged by 12% on Wednesday after it launched two new AI personal computers. These new models are designed for efficiently running AI applications.
Morgan Stanley analysts stated in a client report this week that Lenovo could be a major beneficiary of the AI PC boom. While AI PCs currently account for less than 5% of the market this year, by 2028, about 64% of new PCs will be AI PCs.
Consequently, by 2028, AI PCs will generate up to 53% of Lenovo's revenue, a significant increase from the current 2%.
Before the release of the quarterly earnings on Thursday, Lenovo's stock price fell by 0.18%.
