Lenovo reported a surge in quarterly revenue after stronger PC sales helped the company gain more market share, even as memory chip shortages pushed up costs across the industry.
The world’s largest PC maker said fourth-quarter revenue rose 27% to $21.6 billion for the period ended March, beating analysts’ expectations of $18.7 billion. Profit attributable to shareholders climbed 479% to $521 million, above forecasts of $271 million.
Its shares jumped 15% on Friday, making it the biggest gainer on Hong Kong’s Hang Seng Index.
Lenovo’s biggest business unit, which covers PCs, tablets and smartphones, recorded a 24% increase in revenue. The company said it was the division’s strongest quarterly growth in five years.
The results came as PC makers are currently dealing with high memory prices and supply shortages. Lenovo had earlier warned that the shortage could affect shipments across the industry. The company has also raised prices on some PCs to manage higher component costs.
“Supply (of memory chips) is in heavy shortage, and the cost is growing faster,” Lenovo Chief Executive Officer Yang Yuanqing told Reuters on Friday.
He added that Lenovo’s wider supplier network, including Chinese memory chip producers, helped reduce pressure on the business.
Chinese memory chipmaker ChangXin Memory Technologies recently identified Lenovo as one of its major customers in a prospectus filing. The chipmaker also reported more than 700% growth in first-quarter revenue as memory prices surged.
According to forecasts, memory chip prices doubled in the first quarter and could rise by as much as 63% this quarter. Demand from data centres has tightened supply for laptops, smartphones and cars.
Lenovo said its PC shipment growth outpaced the market by nearly six percentage points during the quarter. Research firm Counterpoint Research said global PC shipments rose 3.2% in the first quarter to 63.3 million units, while Lenovo’s shipments increased 9% to 16.5 million units. That gave the company a 26% share of the global market.
The company is also expanding its server business. Lenovo said its infrastructure solutions group, which includes its server operations, posted 37% revenue growth in the quarter, the fastest among all its business units.
It added that its server order pipeline had reached $21 billion as demand for data centre equipment continued to grow.
