Investing.com-- PC maker Lenovo Group (HK:0992) clocked a sharp decline in its profit for the December quarter as it grappled with weakening demand for smartphones and other devices, although the firm flagged increased growth potential from artificial intelligence.
Lenovo’s net profit attributable to equity holders fell 23% to $337 million in the three months to December 31, the firm said in a statement to the Hong Kong Stock Exchange.
The drop came as increased costs largely offset a 3% rise in quarterly revenue to $15.72 billion.
While Lenovo’s infrastructure solutions group (ISG)- which offers corporate server and cloud services- clocked an operating loss for the quarter, the firm said it expected improved prospects for the unit from a broader push into artificial intelligence.
“The most promising growth catalyst is Artificial Intelligence, which possesses the potential to drive sustained recovery in enterprise demand for technology. The business group’s Generative AI products have started to contribute positively to ISG’s growth trajectory,” Lenovo said.
The PC maker also said that the operating loss in ISG was driven largely by increased investments for developing new products.
Lenovo’s intelligent devices group- which sells its flagship PCs, mobile phones and other devices, remained by far the group’s largest revenue earner. The unit clocked a small year-on-year increase in revenue and profit, signaling some recovery in device sales after nearly two years of weakening sales.
Lenovo has also attempted to integrate AI into its devices, and had recently unveiled a slew of AI integrations for its upcoming product lines.
Still, shares of the firm fell 0.6% in Hong Kong trade.