Lenovo sales drop 24% to $15.3 bn in December quarter

Lenovo Group reported revenue of $15.3 billion (–24 percent) and net income of $437 million (–31 percent) during the October-December period 2022.
Lenovo ThinkPad T480S
“The Group continues to take proactive actions to strengthen its cost competitiveness. We will do this by investing in high-margin growth engines as well as reducing run rate operational expenses,” Lenovo Chairman and CEO Yuanqing Yang said in its earnings report.

Lenovo’s Solutions and Services Group (SSG) revenue grew 23 percent to $1.8 billion, with an operating margin of 20.2 percent and operating profit up 12 percent.

Lenovo’s Infrastructure Solutions Group (ISG) revenue increased 48 percent to a historic high of $2.9 billion. Its operating profit more than doubled to an all-time high of $43 million, marking seven straight quarters of year-on-year improvements.

Lenovo’s server revenue grew 35 percent YTY to a new record, making Lenovo the third largest server company in the world. Lenovo’s storage revenue more than tripled (now #5 in the world), and software grew by 52 percent – both reaching all-time highs.

Lenovo’s revenue from non-PC businesses reached a high of 41 percent and profitability remained solid as Lenovo’s diversified growth engines of Solutions and Services Group (SSG) and Infrastructure Solutions Group (ISG) grew revenue. All main business groups contributed operating profit for the fifth consecutive quarter.

Lenovo’s Intelligent Devices Group (IDG), which posted revenue of $10.6 billion, has maintained the #1 position in the PC market with 23.1 percent market share. It also maintained industry-leading profitability of 7.3 percent, driven by strong product competitiveness reflected in leading Windows activations and resulting in improved inventory levels.

Lenovo’s smartphone business was profitable for the 11th consecutive quarter. Activations from the premium product motorola edge grew by 74 percent.

Lenovo said premium product mix in the tablet portfolio expanded and smart spaces solutions continued to demonstrate growth potential with key wins.

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