In the latest evidence of the PC market’s troubles, Lenovo’s profits dropped a massive 75% in its latest quarterly results.

According to Lenovo’s latest report, the company posted $130 million pre-tax profit for the quarter ending March 2023. For the year-ago quarter, however, the company posted $520 million in pre-tax profit, representing a 75% decline.

The company says its non-PC business grew, but not enough to offset the PC slowdown:

On one hand, non-PC businesses grew 7 percent and made up nearly 40 percent of the combined revenue of the three business groups, 7 percentage points higher year-on-year. On the other hand, persistent macro headwinds weighted on PC operations and led to a 14 percent decline, to US$61.9 billion, in Group revenue, within which, currency conversion alone resulted in a negative impact of 5 percent. Profit attributable to equity holders declined by 21 percent, to US$1.6 billion, or down 10 percent excluding a one-time restructuring and other charges. The decline of non-HKFRS (non-Hong Kong Financial Reporting Standards) net income was smaller at 13 percent.

At the same time, the company attributes decisive action for preventing the situation from being any worse than it was:

Management’s decisive actions throughout the year further streamlined its operating expense structure, maintaining a high level of agility and resilience, and better transcending the cycle. The Group made one- time restructuring and other charges of US$249 million, among various other actions, to deliver annual run-rate group expense savings of about US$850 million. In spite of macro headwinds, additional investments were made to upgrade and differentiate the Group’s technology and services, which are vital to ensuring long-term success of its growth engines, business transformation, and ESG initiatives; R&D (Research & Development) spend increased 6 percent year-on-year.

Despite the positive spin Lenovo is putting on the situation, there is no doubt that the PC market is in bad shape compared to its pandemic high.