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Lenovo Q1 Revenue Jumps 20%, Beats Estimates as PC Market Recovers

An employee gestures next to a Lenovo logo at Lenovo Tech World in Beijing, China November 15, 2019. (Reuters)
An employee gestures next to a Lenovo logo at Lenovo Tech World in Beijing, China November 15, 2019. (Reuters)
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Lenovo Q1 Revenue Jumps 20%, Beats Estimates as PC Market Recovers

An employee gestures next to a Lenovo logo at Lenovo Tech World in Beijing, China November 15, 2019. (Reuters)
An employee gestures next to a Lenovo logo at Lenovo Tech World in Beijing, China November 15, 2019. (Reuters)

China's Lenovo Group reported a 20% rise in quarterly revenue on Thursday, as the global personal computer market showed signs of recovery after a two-year slump.

For the three months ending in June, the company's revenue rose to $15.4 billion, above the average estimate of $14.1 billion expected by analysts polled by LSEG.

This marks a third consecutive quarter of revenue growth for Lenovo after it suffered five straight quarters of revenue declines amid the post-COVID slowdown.

The global personal computer market has shown signs of recovery, with IDC data indicating a return to growth during the first quarter of this year after nearly two years of declines.

For the three months ended June, global PC shipments rose by 3% to 64.9 million units. Lenovo maintained its position as the market leader, holding a 23% market share, according to IDC.

Lenovo's shares down 0.99% in Thursday afternoon trading.

Lenovo has diversified beyond its core PC business, expanding into software and services in recent years.

The company's infrastructure solutions group, which includes servers and other hardware, grew 65% to $3 billion in revenue. Its solutions and services group grew 10% to $1.9 billion for the quarter.

Currently its non-PC business already made by 47% of its revenue mix and company chairman and CEO Yuanqing Yang told Reuters in an interview that this share will grow to 50% in the near future.

Yang said a resurgence in IT spending by businesses and AI-driven demand will boost the company's business lines across the board, including PCs, servers, and enterprise software.

The PC market is being fueled by the emerging trend of "AI PCs" - computers equipped with specialized chips optimized for AI software.

Lenovo, among the first to unveil AI PCs, launched two models in May. Yang projects 10% of Lenovo's shipped PCs will be AI PCs by year-end, potentially rising to 50-60% by 2026.

The AI boom coincides with rising China-US geopolitical tensions, including restrictions on advanced AI technology exports.

Yang said Lenovo was accustomed to such challenges and complies with regulations in all operating regions, enabling it to navigate these issues.

Lenovo's net income for the quarter was $243 million, above the average estimate of $222.94 million expected by analysts polled by LSEG.

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China Trials Cargo Drones, Air Taxis as Low-altitude Economy Gains Speed

An unmanned cargo aircraft developed by Sichuan Tengden Sci-tech Innovation Co. takes part in a maiden flight at an airport in Zigong, Sichuan province, China August 11, 2024. China Daily via REUTERS
An unmanned cargo aircraft developed by Sichuan Tengden Sci-tech Innovation Co. takes part in a maiden flight at an airport in Zigong, Sichuan province, China August 11, 2024. China Daily via REUTERS
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China Trials Cargo Drones, Air Taxis as Low-altitude Economy Gains Speed

An unmanned cargo aircraft developed by Sichuan Tengden Sci-tech Innovation Co. takes part in a maiden flight at an airport in Zigong, Sichuan province, China August 11, 2024. China Daily via REUTERS
An unmanned cargo aircraft developed by Sichuan Tengden Sci-tech Innovation Co. takes part in a maiden flight at an airport in Zigong, Sichuan province, China August 11, 2024. China Daily via REUTERS

Engineers sent China's biggest-yet cargo drone on a test run over the weekend while a helicopter taxi took to the skies on a soon-to-open 100-km (62-mile) route to Shanghai, laying new milestones for the country's expanding low-altitude economy.
Packing a payload capacity of 2 metric tons, the twin-engine cargo drone developed by state-funded Sichuan Tengden Sci-tech Innovation Co took off in southwestern Sichuan province on Sunday for its inaugural flight that lasted approximately 20 minutes, state media reported.
The Tengden-built drone, with a wingspan of 16.1 m (52.8 ft) and a height of 4.6 m (15 ft), is slightly larger than the world's most popular light aircraft, the four-seat Cessna 172, Reuters said.
Manufacturers in the world's top drone-making nation are testing ever larger payloads while transport companies are planning air taxi services both manned and unmanned as China loosens airspace curbs and grants incentives to build up a low-altitude economy. Its aviation regulator foresees a 2-trillion-yuan ($279-billion) industry by 2030, for a four-fold expansion from 2023.
The Tengden trial run followed the maiden flight in June of a cargo drone developed by state-owned Aviation Industry Corp of China (AVIC), the leading aerospace enterprise.
The AVIC's HH-100 has a payload capacity of 700 kg (1,543 pounds) and a flight radius of 520 km. Next year, AVIC plans to test its biggest cargo drone, the TP2000, which can carry up to 2 tons of cargo and fly four times farther than the HH-100.
China has already begun commercial deliveries by drone.
In May, cargo drone firm Phoenix Wings, part of delivery giant SF Express, started delivering fresh fruit from the island province of Hainan to southern Guangdong using Fengzhou-90 drones developed by SF, a unit of S.F. Holding.
Cargo drones promise shorter delivery times and lower transport costs, Chinese industry insiders say, while widening deliveries to sites lacking conventional aviation facilities, such as rooftop spaces in heavily built-up cities.
They could also ferry people on taxi services.
In April, aviation authorities issued a production certificate to unmanned aerial vehicle (UAV) maker EHang Holdings, based in the southern city of Guangzhou, for its passenger-carrying drone, China's first such certification for an autonomous passenger drone.
In a report this year, the government identified the low-altitude economy as a new growth engine for the first time, with vertical mobility seen as a "new productive force" in areas such as passenger and cargo transport.
On Saturday, a manned commercial passenger helicopter took off for the first time from Kunshun, a city in Jiangsu province, to Shanghai Pudong Airport, state media said.
For one-way fares of up to 1,800 yuan, Shanghai NewSky Heli Co aims to cut travel time between the cities to 20 minutes from several hours. As many as 30,000 passengers a year are forecast to use the route, which opens on Aug. 18.
Shanghai aims to expand low-altitude routes to cover other cities in the Yangtze River delta.