Lenovo profit beats expectations, helped by remote working trend
China's Lenovo Group, the world's biggest PC maker, posted a better-than-expected quarterly profit on Tuesday and said it is continuing to benefit from "new normal" remote working after COVID-19.
The Chinese giant said it set new records for group revenue, pre-tax income and net income, and all three key business groups delivered year-on-year growth for the first time in six quarters.
"Last quarter was what I would call a perfect quarter for Lenovo," Chairman Yang Yuanqing told Reuters in a post-results interview.
"I hope the current quarter could be even better." he said.
Lenovo reported a 53% jump in net profit for the quarter ended September to $310 million, beating average analyst estimate of $224 million, according to Refinitiv data.
Revenue increased 7% to $14.5 billion.
With the pandemic forcing companies worldwide to seek work-from-home options and people preferring to stay indoors, the company expects to benefit from increased sales of PCs and tablets.
"Our gaming PCs and our thin-and-light PCs actually grow margin faster than other products," said Yang.
According to research firm Gartner, worldwide shipments of personal computers rose 3.6% in the July-September quarter, due to home entertainment and distance learning needs, along with the strongest growth the U.S. PC market has seen in 10 years.
Yang predicted a further 5% to 10% industry-wide increase of total addressable market for PCs next year.
Yang said a component supply shortage, particularly for display and integrated circuit, is keeping the company from meeting 100% customer demand.
"The issue is not demand, it's supply. If we can fill enough supply, we can sell more products," he said.