Chinese language private pc maker Lenovo warned on Thursday it confronted short-term volatility and challenges from the coronavirus outbreak, because it reported a greater than anticipated quarterly revenue and document income.
The world’s largest PC maker is amongst firms dealing with disruptions to their provide chain after native governments prolonged a Lunar New 12 months vacation and imposed strict journey curbs to restrict the unfold of the coronavirus.
One in every of Lenovo’s largest factories is within the central metropolis of Wuhan, the epicentre of the outbreak, the place companies stay shut, though its factories within the cities of Shenzhen and Hefei resumed work on February 10.
“The overwhelming majority of the group’s factories in China have reopened and are operational on a restricted foundation, though its suppliers and even logistics companies throughout the international locations remained impacted,” Lenovo stated in an announcement.
“However, given its intensive world footprint, the corporate is well-positioned to deal with the availability challenges by leveraging its power as a world firm with worldwide manufacturing capabilities and provide chain effectivity.”
Shares of Apple and its suppliers dropped on Tuesday after the iPhone maker warned gross sales won’t meet forecasts within the present quarter because the coronavirus outbreak was pressuring its provide chain.
Lenovo was given a respite after an early January commerce settlement between Washington and Beijing eased 18 months of tensions.
Laptop computer computer systems have been amongst $156 billion price of Chinese language items that Washington had threatened to hit with tariffs in December, together with cellphones and toys, which US. President Donald Trump later determined to not implement.
Lenovo stated on Thursday internet revenue for the quarter ended December rose 11 % to $258 million because of sturdy demand for its PCs and sensible gadgets, beating a median $223 million estimate of seven analysts, in line with Refinitiv information.
Income rose to $14.1 billion from $14 billion in the identical quarter final 12 months, in comparison with a median $13.6 billion estimate of 10 analysts.
The worldwide PC market grew 2.Three % within the quarter to December, as clients changed machines emigrate to Home windows 10, market analysis agency Gartner stated final month. Lenovo took a 24.eight % market share through the quarter, forward of rivals HP and Dell, it stated.
Shares in Lenovo rose 2 % by the noon break in Hong Kong on Thursday earlier than the outcomes. The have risen 5.7 % because the begin of the 12 months however are nonetheless down greater than 1 / 4 from the 3-1/2-year excessive hit in April.
© Thomson Reuters 2020