0336 GMT - Lenovo's infrastructure-solution business could take longer than expected to return to profitability, Morningstar analyst Kazunori Ito says in a research note. Although the PC maker narrowed the segment's loss, the analyst reckons the improvement in the June quarter wasn't substantial given the revenue surge, and would be much smaller without the impact of the one-time restructuring charges recorded in the March quarter. Morningstar thinks that in addition to heavy research and development costs, Lenovo accepted low-margin projects to win orders from cloud-service providers, prioritizing orders to catch up in the AI server business. As a result, Morningstar raises its revenue forecast for the current fiscal year to $65 billion from $61.5 billion but lowers its operating margin assumption to 3.6% from 3.9%. (sherry.qin@wsj.com)
(END) Dow Jones Newswires
August 18, 2024 23:36 ET (03:36 GMT)
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