Lenovo caught off guard by tariffs even as AI PCs deliver strong annual revenue
Lenovo Group , the world's largest personal computer maker, said it is grappling with an unexpected blow from the latest US-China tariffs, even as robust demand for artificial intelligence (AI) products helped the company deliver strong annual results for the last financial year.
The Beijing-based company reported on Thursday that revenue for the year ended March 31 climbed 21 per cent to US$69.1 billion, with net income rising 37 per cent to US$1.4 billion – results that are among the best achieved in the company's history. Chairman and CEO Yang Yuanqing attributed the gains to Lenovo's 'hybrid AI' strategy, which targets both consumer and enterprise markets.
But Yang also warned that the decision by the administration of US President Donald Trump to raise tariffs on Chinese goods had caught the company off guard, weighing heavily on its most recent quarter.
'When the 20 per cent tariffs were announced in March, they were implemented so suddenly that we didn't even have time to prepare,' Yang said in a media briefing on Thursday.
Those tariffs, implemented on March 4, were not part of the deal between the two countries this month that temporarily suspended certain tariffs for 90 days.
'It had a significant impact on our performance last quarter,' Yang said, describing the hit as a 'pretty big number' that prevented even stronger profit growth.
Lenovo's Hong Kong-listed shares fell 5.4 per cent to HK$9.57 on Thursday, reflecting investor concerns over the company's exposure to escalating US-China trade tensions.
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