Lenovo’s profits doubled sixfold amid the processor shortage crisis

China’s Lenovo Group posted a fourth-quarter profit that beat expectations with a 512% growth as more people work and study from home, driving demand for the world’s largest PC maker.

The company’s profit in the quarter ended March 31 jumped to $260 million, exceeding the average analyst estimate of 204.7 million, and revenue grew 48% to $15.63 billion from 10.58 billion a year ago. Note that analysts’ expectations were $14.33 billion, and Lenovo predicts that this growth will remain sustainable even after people return to their offices in some countries because the epidemic has changed people’s behavior.

After modest growth during 2020, the number of PC shipments around the world rose by nearly a third during the quarter ending in March, recording the fastest annual growth in nearly two decades. The results of this can be seen in Lenovo’s comments, where its board of directors proposed a final dividend to shareholders of 24 HKD cents per share for the year ended March 31, given that the company paid 21.5 cents per share in 2020.

Lenovo said it is currently “in better shape” despite the global chipset crisis, mainly due to unexpected demand for personal computers, tablets and electric cars, and added that it will continue to grow and outperform its competitors in the market due to its distinctive hybrid supply chain model in obtaining pieces from local and external sources.

Lenovo’s strength in PC market leadership has increased, reaching nearly a quarter’s share, surpassing HP’s 21.4% share and Dell’s 16.5%.

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