(Reuters) – China’s Lenovo Group, the world’s largest PC maker, warned it will have to raise the prices of its products in the USA, rates to increase, sending its shares tumbling 6.5% to two-month lows.
FILE PHOTO: A man uses his laptop next to the Lenovo logo during the Mobile World Congress in Barcelona, Spain, February 25, 2016. REUTERS/Albert Gea
Lenovo is a warning in the middle of the installation business and the uncertainty that is the result of the US-China trade war, cast doubt on the sales outlook, and it took the shine off forecast-beating quarterly results, where ‘ robust PC sales, the company has helped more than double the amount of your income.
The US President, Donald Trump said this week that he would postpone the imposition of a 10% tariff on Chinese-made products such as tablets and laptops, up to and including December, however it still would be the imposition of tariffs on desktops, and at the end of September.
“Retail prices for the products, such as pcs and smartphones, will grow as the US to increase these rates,” Lenovo Chairman Yang Yuanqing told the transcript on Thursday.
He also said that it is moving production out of China to avoid the US tariffs would lead to the price of the product increases, even though Lenovo’s global manufacturing footprint gives you the flexibility to make adjustments to it, and it will continue its commitment to China.
The worldwide PC market grew by 1.5% in the June quarter, after falling for two consecutive quarters, as a threat of increased U.S. tariffs on Chinese goods prompted a number of manufacturers to frontload the shipments, the analysts said.
Lenovo emerged as the biggest winner of the global PC market is the surprise of a pick up in the second quarter of the year. The quote in the industry, the company said that it will be a record of 25.1% of the market share in the quarter.
Lenovo said that it will be the world’s fastest-growing PC maker among the top five manufacturers, an improved product mix also contributed to the business’ pre-tax profit margin increase of 5.4%, the highest margin ever achieved in the fiscal first quarter of the year.
Sales of Lenovo’s personal computers and smart devices of the group increased by 12%, while in the mobile business, the group recorded a 9% drop in sales.
Your PC and smart devices in a business that generates more than three-quarters of the group’s total revenue, which increased by 5%.
Net income rose to $162 million in the quarter ended in June, compared with a median estimate of $154 million from nine analysts, according to the Refinitiv of the data. Revenue rose to $12.51 billion, which is in line with our expectations.
Reporting Rushil Dutta, and Sijia Jiang; Editing by Stephen Coates, Miyoung Kim and Muralikumar Anantharaman