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Lenovo Beats Expectations For Quarterly Profits Due To Remote Working Trend

Lenovo Beats Expectations For Quarterly Profits Due To Remote Working Trend
The new normal of remote working and working from home forced on the world because of the novel coronavirus pandemic has benefitted it, said China's Lenovo Group, the biggest PC maker of the world, while it reported quarterly profits which were much better than what analysts were expecting.  
In terms of the company’s group revenue, pre-tax income and net income, new records had been set during the latest completed quarter by it, the Chinese giant said. It added that for the first time in six quarters, year on year growth was achieved by all of the three key business groups of the company.
"Last quarter was what I would call a perfect quarter for Lenovo," Chairman Yang Yuanqing told the media in an interview after announcing the results. "I hope the current quarter could be even better." he said.
A mammoth 53 per cent growth in its net profit was reported by Lenovo for the quarter ended September which was at $310 million. That amount easily beat the estimates of net profit of $224 million of analysts according to Refinitiv data.
The company also reported a 7 per cent growth in its revenues which touched $14.5 billion.
The company is hoping to make further gains from an increase in sales of PCs and tablets because of companies worldwide being forced due to the pandemic to opt to allow their workers to work from home and as the pandemic forces people to stay indoor more than previously.
"Our gaming PCs and our thin-and-light PCs actually grow margin faster than other products," said Yang.
In the July-September quarter, there was an increase of 3.6 per cent in the shipments of personal computers globally, according to research firm Gartner, because of the need for PCs to meet home entertainment and distance learning needs. Gartner also reported the biggest growth in the PC market in the United States in more than the last 10 years.
Next year, another 5 per cent to 10 per cent industry-wide increase of total addressable market is being predicted by Yang.
With 25.7 per cent market share, its lead in the market was further strengthened by Lenovo. In comparison, HP Inc and Dell Technologies have control over 21.6 per cent and 15.2 per cent of the market respectively.
The company is being prevented from meeting a 100 per cent of its customer demand because of a shortage of component supply, particularly for display and integrated circuit, Yang said.
"The issue is not demand, it's supply. If we can fill enough supply, we can sell more products," he said.

Christopher J. Mitchell

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