China's Lenovo posts quarterly profit far short of estimate
China's Lenovo, the world's largest personal computer manufacturer, said fourth-quarter profit plunged 64% - a result that was far worse than expected and one that sent its shares sharply lower.
The profit slide was mostly due to a fair value loss on warrants but the company was also hurt by US President Donald Trump's decision in March to double fentanyl-related tariffs on all Chinese imports.
"The 20% tariffs announced in March were implemented suddenly and left us no time to prepare. It had a significant impact on our numbers in the last quarter - it's not a small number," Lenovo's CEO Yang Yuanqing said in conference call.
Lenovo's shares tumbled 5.4%, underperforming a 1.3% fall in the Hang Seng index.
While the US and China have rolled back most of their tariffs levied since April, the 20% tariff remains.
Yang told Reuters in an interview that if tariffs impacted costs, the company would raise prices. Lenovo has 30 manufacturing facilities in more than 10 countries, and that its diversified manufacturing bases can help it navigate US tariffs, he added.
Net profit for Lenovo, which also manufactures smartphones and offers cloud computing solutions, came in at $90m, well short of an LSEG consensus estimate of $225.8m.
But overall revenue for the January-March quarter climbed 23% from the same time a year earlier, ahead of analysts' expectations of $15.6 billion.
The company's infrastructure solutions group, which includes servers, did particularly well, posting a 64% jump in revenue. Its solutions and services group, which offers cloud-based software for enterprise clients, saw revenue surge 22%.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Independent
5 hours ago
- Irish Independent
Dollar sinks to four-year low as euro surges
©Reuters Today at 21:30 The euro hit its highest level in almost four years against the dollar, as investors rushed into safe-haven assets while remaining cautious about the impact of the US-China trade deal. Analysts noted that the US dollar serves as a key barometer of trade talks sentiment, while geopolitical instability prompted investors to buy safe-haven Swiss francs and yen.
Irish Times
7 hours ago
- Irish Times
Tariff ‘uncertainties' could ‘weigh heavily' on Irish economic growth
Ireland is the country most exposed to the threat of US tariffs after Mexico and Canada, the OECD said on Tuesday, with exports to the US accounting for close to 20 per cent of GDP. The group's economic outlook says Donald Trump's trade policies will damage consumer and business sentiment in Ireland and could 'weigh heavily' on economic growth if the US administration adds pharmaceuticals to the list of imports subjected to tariffs. The Paris-based organisation also warned that public spending in the Republic is 'surging' as the new Government rolls out measures announced in Budget 2025. While the State's tax revenues remain strong, the impact of Mr Trump's trade agenda could lead to 'weaker' returns, putting pressure on the public coffers. The OECD said these 'looming risks warrant greater fiscal prudence' on the Coalition's part. READ MORE The organisation also warned that mounting uncertainties around tariffs are expected to weigh on consumer and business sentiment and 'restrain business investment and household consumption' in 2025 and 2026. Due to the 'key role of a few foreign-owned multinationals in export-oriented sectors, like pharmaceuticals or advanced computer and business services', it said, new industry-specific tariffs could lower economic growth and 'adversely impact fiscal balances'. In Ireland, GDP group is now projected to come in at 3.7 per cent this year, falling to 2.3 per cent in 2026. Modified domestic demand, which controls for the big distortions arising from the activity of multinationals, is projected to expand by 2.2 per cent in 2025 and 2.1 per cent best year, in 2026, below its long-term average of 2.7. Gloablly. the OECD forecasts global economic growth to slow to 2.9 per cent this year from 3.3 per cent in 2024. It expects the rate of expansion in the US will tumble further, to 1.6 per cent from 2.8 per cent last year – an outlook that is significantly lower than its projection 2.2 per cent in March. Washington's policies have tipped the world economy into a downturn clouded in heightened uncertainty, with the US among the hardest hit, it said in its twice-yearly economic outlook report on Tuesday. 'Weakened economic prospects will be felt around the world, with almost no exception,' chief economist Alvaro Pereira said. 'Lower growth and less trade will hit incomes and slow job growth.' The assessment indicates how Trump's policies have become the most pressing problem for the global economy, with no easy solution in sight. The situation could yet be exacerbated by retaliation from US trading partners, a further erosion of confidence, or another bout of repricing on financial markets, the OECD said. The club of 38 rich countries published its forecasts just as its members' ministers convene in Paris for an annual meeting. Top commerce officials are expected there include US trade representative Jamieson Greer and EU trade commissioner Maroš Šefčovič. Lin Feng, a representative from China's ministry of commerce, is also scheduled to attend. 'Agreements to ease trade tensions and lower tariffs and other trade barriers will be instrumental to revive growth and investment and avoid rising prices,' the OECD said. 'This is by far the most important policy priority.' Yet the organisation also said that even if Trump reversed course on tariffs, the bonus in terms of growth and reduced inflation would not materialise immediately, due to a persistent drag from heightened uncertainty over policy. For the US, the OECD said curbs on immigration and a sizeable reduction in the federal workforce add to the trade-related drag on the economy. It also cautioned that the budget deficit will expand further as the effect of weaker economic activity will more than offset spending cuts and revenues from tariffs. Inflation in the US will also move higher this year, making it likely that the Federal Reserve will not resume easing policy until 2026, according to the OECD. That process may even be derailed if consumer-price expectations get de-anchored, it added. Besides the fallout from global trade, the organisation also warned that fiscal risks are intensifying around the world, with 'tremendous' pressures for more spending on defence, climate and ageing populations. It called for governments to reduce non-essential spending and raise revenues by broadening tax bases. – Additional reporting by Bloomberg
Irish Times
15 hours ago
- Irish Times
Tánaiste told Trump trade representative tariffs ‘threaten' US-Ireland relationship
Tariffs 'threaten' relations between America and Ireland and are bad for those on both sides of the Atlantic, the Tánaiste has told US trade representative Jamieson Greer. Speaking after a virtual meeting with Mr Greer, Simon Harris , who is also Minister for Foreign Affairs and Trade, said he will stay in touch with his Washington counterpart 'as we seek to bring this trade dispute to an end'. The meeting between the pair on Thursday was described as 'positive' and 'constructive' by the Irish side. A readout from the Office of the US trade representative is not yet available. The EU had been slated for a 20 per cent tariff under the reciprocal rates announced by US president Donald Trump in April. A temporary pause took the rate down to 10 per cent through July 8th. READ MORE In late May, Mr Trump expressed frustration with the pace of talks and threatened to raise the tariff rate to 50 per cent , although he later said he would hold off on the threat until July 9th . Thursday's discussion followed on from a meeting between Mr Harris and US commerce secretary Howard Lutnick in Washington in April. According to the Irish Department of Foreign Affairs, the two politicians on Thursday 'discussed recent trade developments, including a constructive exchange of views on the ongoing negotiations between the US and EU.' Mr Harris said he outlined to Mr Greer the 'hugely successful two-way economic relationship between the US and Ireland'. 'I explained how tariffs threaten this relationship and are bad for business, bad for consumers and bad for workers on both side of the Atlantic,' Mr Harris said. The Tánaiste said he assured Mr Greer of Ireland's 'commitment to supporting a mutually beneficial agreement that works for the US and the EU'. He welcomed Mr Greer's positive meeting with European commissioner for trade and economic security, Maros Sefcovic, in Paris last week. After the meeting with Mr Sefcovic, Mr Greer said the EU had provided the US with 'a credible starting point for discussions on reciprocal trade' and the discussion showed Washington 'a willingness by the EU to work with us to find a concrete way forward to achieve reciprocal trade'. The European Commission is preparing to navigate another round of trade talks with President Trump's administration. Last week, the EU threatened to speed up retaliatory measures against the US if President Trump follows through on his threat to impose a 50 per cent levy on steel and aluminium imports. The Irish Government has been lobbying the European Commission to try to keep important domestic sectors like aviation, medtech, agricultural feed and whiskey out of the transatlantic trade war.
