Lenovo, the world’s second-biggest maker of personal computers,says profits soared 90 percent in fourth-quarter, driven by increasing its market share and boosting smartphone sales.

Net income climbed to $126.9 million in the three months ended March, from $66.8 million a year earlier, Lenovo said in a statement today. That beat the $108.1 million average of eight analysts’ estimates compiled by Bloomberg.

Revenue rose 4 percent over a year earlier to $7.8 billion. That compares with the $7.98 billion average of 14 estimates compiled by Bloomberg.

For its full fiscal year ending March 31, Lenovo’s profit rose 34 percent to $635 million on a 15 percent rise in sales to a record $34 billion.

The positive news came just days after Lenovo confirmed to WRALTechWire that a “small number” of layoffs had been made among full-time workers and contractors at its Morrisville campus.

Lenovo is developing mobile devices such as smartphones and tablets as it seeks to lure customers from Apple Inc. and Samsung Electronics Co. and weather a global slump in demand for PCs. The company maintained PC sales and expanded market share in the quarter, even as global shipments dropped 13.9 percent, researcher International Data Corp. reported in April.

“Somebody over there is doing something right,” Alberto Moel, an analyst at Sanford C. Bernstein & Co. in Hong Kong, said by telephone. “The size of the beat is quite solid. They did better margins everywhere, with material expansion in PCs in Europe, Middle East and Africa as well as North America, while the smartphone business also continued to improve.”

Lenovo, which has its headquarters in Beijing and Morrisville, rose as much as 4.3 percent and traded 0.4 percent higher in Hong Kong. The stock has climbed 2.6 percent this year, surpassing the 0.1 percent gain for the city’s Hang Seng Index.

Increased Share

Lenovo was the only one of the top five vendors to avoid a decline in PC shipments, and boosted its share of the global PC market to 15.3 percent in the period, from 13.2 percent a year earlier, as the company “continues to execute on a solid ‘attack’ strategy,” IDC said in the April report.

Lenovo narrowed the gap with market leader Hewlett-Packard Co., which saw its share fall to 15.7 percent from 17.7 percent, according to IDC.

Lenovo introduced touchscreen handsets in Russia, India, Indonesia, Vietnam and the Philippines last year following the debut of its first model in China in 2010. The company this month said it will introduce its first smartphones in Africa, with a release planned for Nigeria before the end of the year.

The company cemented its position as the second-largest smartphone vendor in China, behind Samsung, by more than tripling shipments in the quarter, Lenovo said today. The Mobile Internet Digital Home (or MIDH) unit that sells handsets boosted total sales 74 percent to $736 million in the period, while profitability “continued to improve,” the company said. (See chart posted with this report.)

Lenovo said sales of desktop and laptop PCs both declined 2 percent to $2.4 billion and $4.2 billion, respectively, but still made up a combined 83 percent of its business.

MIDH sales accounted for 9 percent of revenue.

“We will focus our investments on the fast-growing tablet, smartphone and enterprise hardware areas, while working to enhance the profitability of our core PC business,” said chairman Yang Yuanqing.

For its full fiscal year ending March 31, Lenovo’s profit rose 34 percent to $635 million on a 15 percent rise in sales to a record $34 billion.

Lenov entered the wireless Internet market in 2010. It has launched smartphones and Web-linked tablet computers to compete with Apple Inc. and South Korea’s Samsung Electronics Corp.

The company said quarterly sales in North America, traditionally a weak area for Lenovo, rose 13 percent over a year earlier to $1.2 billion, accounting for 15 percent of the global total. It said its market share rose 1.8 percentage points to 9.3 percent.
In its home China market, quarterly sales rose 8 percent to $3.1 billion and revenue for mobile Internet products rose 74 percent.