Lenovo Clocks Slowest Revenue Growth In 7 Quarters As Pandemic Demand Cools Down

Lenovo Group Ltd LNVGY reported fourth-quarter FY21/22 revenue growth of ~7% year-on-year to $16.69 billion, below the consensus of $17.36 billion.
SSG revenue grew 28% and improved its operating margin by more than 1 point Y/Y.
ISG sustained its profitability. IDG improved its operating margin Y/Y.
It marked Lenovo's slowest growth in seven quarters, as people shopped for fewer of its personal computers during pandemic recovery, Reuters reports.
The sales have begun to lose steam as China, its biggest market, was hit by the Omicron variant, prompting many cities to impose lockdowns and shut factories.
Net income rose 58% Y/Y to $412 million, translating to EPS of $3.52.
"Although last year was challenging for the world, with the accelerated global digital and intelligent transformation, Lenovo delivered a record year of profit and revenue," said Yuanqing Yang, Chair and CEO. "All our main businesses are now profitable for the full year, and our new growth engines – SSG, ISG, and Mobile – are showing strong momentum."
Lenovo's winning streak, boosted by the pandemic-fuelled buying of laptops and other personal gadgets, will likely cool this year as demand for PCs slows and market share gain becomes limited.
Price Action: LNVGY shares closed lower by 1.93% at $18.25 on Wednesday.
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