China's Lenovo shares up after 3Q net profit drop

Shares in Lenovo surged almost six percent Wednesday, a day after it announced a better-than-expected third-quarter net profit, boosted by a strong performance in its smartphone unit following the purchase of Motorola last year.

The world's biggest PC maker said it earned $253 million in the final three months of 2014, five percent less than the previous year but better than the average $182.4 million forecast by analysts in a Bloomberg News survey.

The news sent its shares jumping 5.86 percent to HK$11.56 by the break in Hong Kong Wednesday.

However, while growth in the PC market is softening, the firm said revenue increased 31 percent year-to-year to $14.09 billion, thanks to a more than doubling of mobile phone sales to $3.39 billion.

Global mobile phone shipments surged 78 percent to 24.7 million units in the quarter, boosted by the $2.9 billion purchase of Motorola from Google in October, according to a company filing with the Hong Kong exchange.

That buyout came soon after the Chinese giant paid $2.3 billion for IBM's server as it looks to diversify its business beyond PCs.

"Lenovo continued to deliver solid performance along with smooth integration of two major mergers and acquisitions transactions," it said in the filing.

"Lenovo has now become a truly global smartphone player."

CEO Yang Yuanqing told Bloomberg News: "We are very fortunate that both of the acquired businesses performed pretty well.

"Motorola is growing volume very fast -- they almost doubled volume year on year -- and for the first time delivered more than 10 million units last quarter."