(Bloomberg) — Lenovo Group Ltd.’s quarterly profit beat estimates, helped by the company’s efforts to diversify its business to counter waning personal computer demand.

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Net income fell to $437 million in the final quarter of last year, the world’s biggest PC maker said Friday in a statement. Analysts predicted $395.7 million, the average of estimates compiled by Bloomberg. Revenue fell to $15.3 billion, compared with the $16.4 billion analyst projection, weighed down by a stronger US dollar.

Global PC shipments plunged 28% last quarter to 2018 levels as work-from-home demand withered with people returning to offices following pandemic-era restrictions, according to International Data Corp. Although the top three vendors led the fall, Lenovo’s decline was marginally slower than that of long-time rivals HP Inc. and Dell Technologies Inc.

Beijing-based Lenovo’s non-PC businesses are helping the company withstand economic challenges, Bloomberg Intelligence analyst Steven Tseng said ahead of the earnings report. “An increasing market share and solid order backlog for its data center and services could aid sales,” he said in a memo.

Shares of Lenovo retreated as much as 3.3% in Hong Kong on Friday morning before the results were released.

In the coming quarters, China’s pledge to spur consumer spending could boost electronics sales. The country dropped its stringent Covid restrictions late last year following widespread protests.

But the recovery could be a bumpy one. While the smartphone market could see a modest recovery this year, PC sales could face more challenges because of lackluster demand from corporations, Tseng and Sean Chen said in a separate memo.

“Companies might remain cautious in the near term and tighten spending on digital infrastructure,” they said. “Yet Lenovo could stand out as it’s poised to be the major beneficiary of China’s localization push to replace foreign-branded PCs in the public sector.”

–With assistance from Vlad Savov.

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