Lenovo Revenues Fell 24 Percent in Q4

Perhaps not surprisingly, the world’s largest PC maker experienced its worst-ever revenue decline in the fourth quarter of 2022: Lenovo reported that it earned a net income of $437 million, down 32 percent year-over-year (YOY), on revenues of $15.3 billion, down 24 percent, in the quarter ending December 31.

“While the industry faces significant macroeconomic pressures, Lenovo sees long-term opportunities ahead as the global trends of digitalization and intelligent transformation continue to accelerate and IT spending is expected to recover to a moderate growth rate in the mid-to-long term,” the Lenovo report explains. “In the PC sector, real demand, as reflected by the activation data in 2022, is much better than the industry shipment data indicates as the channel consumes excess inventory. The Group expects year-on-year growth to resume in the second half of the calendar year with end-user demand to be higher than pre-Covid levels.”

So there’s some good news, and I believe this is the first time a PC maker has made such a prediction. But we must examine the quarter in question for now. And this news, alas, is not good. There’s also not a lot of data.

Yes, Lenovo maintained its position as the number one maker of PCs in the quarter, but that’s a low bar: using data from IDC and Gartner, I previously observed that Lenovo’s unit sales declined 28.5 percent YOY to 15.55 million in the previous quarter.

Aside from that, it’s interesting to me how little Lenovo mentions the PC in its earnings report: the firm notes that its diversification efforts have led to the PC being just 59 percent of its revenues now, which seems like a smart strategy given today’s market. And a related infographic provides growth charts for Lenovo’s other businesses, but not the Intelligent Devices Group that is responsible for its PC sales. And that’s about it.