China’s Lenovo reports 64% profit decline in fiscal Q4

China’s Lenovo, the world’s largest personal computer manufacturer, on Thursday reported a worse-than-expected 64% fall in fourth-quarter profit, which it said was mostly due to a non-cash decline in the value of warrants.

Lenovo reported revenue of $16.98 billion for the quarter ended March 31, which exceeded analysts’ expectations of $15.6 billion, LSEG data showed.

Net profit to the company’s owners came in at $90 million, well short of the average analyst estimate of $225.8 million, according to LSEG data.

Lenovo launched its first AI-powered PCs in China last May and followed that with a global rollout in September. CEO Yang Yuanqing has projected that AI PCs will account for a quarter of Lenovo’s shipments by 2025, potentially reaching 80% by 2027.

The company has integrated technology from Chinese startup DeepSeek – which has upended the AI sector with its low-cost model – into its devices, including PCs and tablets.

Lenovo’s infrastructure solutions group, which includes servers, posted a 64% revenue increase in the March quarter compared with the previous year.

The solutions and services group, which offers cloud-based software for enterprise clients, reported $2.2 billion in revenue, up 22% from a year earlier.Lenovo’s Hong Kong-listed shares dropped 2.08% after the earnings release. They have dipped 1.69% for the year to date.