Lenovo's Revenue Beats Estimates as PC Arm Shows Signs of Life

Lenovo Group posted its fastest pace of revenue growth in more than two years by pushing higher-priced computers and expanding its datacenter business in a stabilizing PC market, according to Bloomberg.

The world’s second-largest PC vendor reported a 69 percent plunge in net income to $33 million in the three months ended March as it grappled with rising expenses. Sales however jumped 11 percent to $10.6 billion, surpassing the $9.8 billion projected and marking its first double-digit percentage increase since late 2015.

Lenovo, which became the world’s worst performing technology stock as its smartphones struggle for relevance and it loses ground to rivals such as HP, has focused on burnishing the premium veneer of its bread-and-butter PCs while moving more deeply into the lucrative gaming segment. The company is trying to reverse the years of declining growth that got it kicked off Hong Kong’s benchmark index this year.

The company’s shares climbed as much as 4.4 percent after it released results. The stock is set to leave the Hang Seng Index next month after plunging 56 percent since it was added to the gauge in 2013.

Revenue from PCs and devices climbed 16 percent to $7.7 billion in the quarter, the highest in four years, Lenovo said in a statement. But higher costs, for instance of memory chips, pushed the division’s profit 2 percent lower.