Lenovo net profit up 90% as smartphone shipments soar

PC sales in China and high growth in smartphones shipments helped boost Lenovo's net profit for its fiscal fourth quarter by 90% year-over-year.

For the quarter ended March 31, Lenovo's net profit was $127 million, the company said this morning. Revenue broke records and was at $7.8 billion, growing four percent from the same period last year.

In Lenovo's home market of China, the company had an operating margin of 4.9%, an increase of 8% year-over-year. The company also saw continued profitability in its mobile devices business, which makes up 9% of its overall sales. At the end of the quarter, Lenovo's smartphone shipments were up 206% year-over-year.

Globally, PC shipments were down 13.9% year-over-year in the quarter, the market's steepest decline since research firm IDC began tracking the market in 1994. Lenovo itself posted flat year-over-year PC shipment growth in the period.

Related:

Smartphone and tablet popularity have hurt PC sales, according to analysts. Computers running Microsoft's Windows 8 have also failed to drum up consumer interest in the previous two quarters.

Lenovo, however, has managed to weather the slowdown by taking advantage of the Chinese PC market, where it has an over 30% market share. Close to half of the company's revenue comes from the country, now the world's largest PC market.

The company is now close to surpassing leading PC vendor HP for the top spot. The company had a 15.3% share of the market in this year's first quarter, while HP had a 15.7% share.

But the Chinese PC maker also plans to focus more of its investment on tablets, smartphones and enterprise hardware, the company's CEO Yang Yuanqing said. Earlier this year, Lenovo also reorganised its operations to sharpen the company's branding and compete better in high-end products.