Lenovo reports flat revenue in Q2 amid COVID lockdowns

Lenovo Group, the world's biggest maker of personal computers, reported flat revenue for the quarter from April-June quarter, when many Chinese cities were hit by COVID 19 lockdowns, marking its most subdued result in eight quarters.

Total revenue came in at $16.96 billion, which is a good estimate from seven analysts, which was close to the average Refinitiv estimate of $16.87 billion. The net income attributable to shareholders increased by 11% to $516 million.

Major laptop manufacturing partners including Quanta, Compal and Wistron suffered major manufacturing disruptions in China during the quarter, according to a report by Counterpoint, which was a blow to the PC supply chain.

It was also coincided with the global PC industry coming off the Pandemic-fueled sales boom and the war in Ukraine, prompting several companies from chipmakers to warn of a slowdown in demand.

Global shipments fell 11.1% in the past quarter from a year ago, the largest year-over-year decline since the second quarter of 2013 according to Counterpoint.

Lenovo said that the PC market is currently experiencing short-term challenges. Counterpoint stated that Lenovo's total PC shipments fell 12.7% to 17.4 million units due to weak consumer demand. Lenovo has a 24.4% share in the global PC market.

Growth in Lenovo's server and other non-PC business has been driven by strong demand from companies to upgrade their digital capabilities. The company reported 37% revenue growth in its non-PC business during the quarter.