Lenovo Group, the world’s biggest personal computer maker, says its latest quarterly profit rose 19 percent, driven by sales growth outside its home China market.

However, shares fell 5 percent as results disappointed some investors. Sales in its largest market – China – were down 2 percent from a year ago, and sales in North America were flat.

In other news, Lenovo  (ADR: LNVGY) also added Yahoo co-founder Jerry Yang to its board of directors.

The company said Thursday profit rose to $262 million, or 2.5 cents per share, in the three months ended Sept. 30. Revenue rose 7 percent to $10.5 billion.

While earnings met or topped most expectations, revenue did not.

Bloomberg, Daiwa and Barclays analysts surveys expected earnings of $254 million to $260 million.

Revenue estimates ranged from $11.2 billion to $11.49 billion.

Barron’s also noted that Lenovo drove up earnings by selling some assets. 

“Other income was $1.2 billion, all coming from ‘net gain on disposal of available-for-sale financial assets.’ In other words, from selling short-term cash investments. As a result, net income at Lenovo came in at $262 million, up 19% from a year ago and slightly beating the street estimate of $260 million,” wrote blogger Shuli Ren.

Lenovo also said it shipped a record 35.6 million smartphones, personal computers and tablets globally.

Sales of smartphones, tables and other mobile devices declined 6 percent while those of Lenovo’s traditional desktop PCs rose 6.4 percent. The company said smartphone shipments rose 38 percent.

“Lenovo had another strong quarter that saw excellent market share gains and profit expansion. Not only did we reach nearly 20 percent share in PCs, but we became  No. 1 in the broader PC+ tablet market for the first time. In May, we set this as a two year goal, but achieved it in two quarters,” said Yuanqing Yang, chairman and CEO of Lenovo, in a statement.

“And in the last month, we successfully closed both our Motorola Mobility and IBM x86 acquisitions. With these two deals, we are now  No. 3 in both businesses, but we are not satisfied. We will replicate our success in PCs by outgrowing the market to challenge the top two. Mobile and Enterprise are now our new growth engines, and over time, like PCs, they will become our profit pool as well.”

During the quarter, Lenovo completed its $2.9 billion acquisition of Motorola Mobility from Google Inc. in an effort to expand its presence in the global smartphone market.

Quarterly highlights according to Lenovo included:

  • Pre-tax income of US$329 million, earnings of US$262 million and US$10.5 billion in revenue make for solid quarter with balanced geographical growth
  • Achieved record high PC market share of nearly 20 percent; became #1 in the PC+Tablet category
  • Sold a record 35.6 million smartphones, PCs and tablets, almost 5 devices per second
  • Basic EPS of 2.52 US cents, or 19.54 HK cents
  • Net cash reserves of US$3.2 billion (as of September 30, 2014)