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Lenovo earnings soar on solid PC, smartphone sales

Fourth-quarter profits jump by 25 percent as laptop, desktop, and smartphone sales all rise.

Lenovo's ThinkPad X1 Carbon Sarah Tew/CNET

Lenovo continues to buck the trend with higher PC sales in a slumping market as it also grows stronger in the smartphone arena.

For the fourth quarter ended in March, the world's No. 1 PC maker reported a 16 percent jump in laptop sales to $4.8 billion. That number accounted for 51 percent of total company revenue. Over the same time, Lenovo's laptop shipments rose by 12.9 percent versus a 5.8 percent downturn for the industry as a whole.

Sales of desktop PCs grew by 14 percent over the same quarter a year ago to hit $2.7 billion, 29 percent of the company's total worldwide sales. Desktop shipments rose by 6.8 percent, standing out from an industry drop of 3.1 percent.

Lenovo's total earnings for the quarter shot up by 25 percent year over year to $158 million, while sales climbed by 19 percent to $9.4 billion. Net income for the year ending in March was up 29 percent year over year to $817 smillion, a record high for the company that's in line with analyst estimates of $819.7 million, reported Reuters.

Last year the Chinese PC maker finally surpassed HP as the world's top PC vendor, according to IDC and other reseachers. But with the worldwide PC market hardly at its best, Lenovo has been expanding its presence in smartphones and tablets.

During the quarter, smartphone shipments rose by 59.4 percent, surpassing the global market by 28 percent, according to Lenovo. Tablet shipments hit 9.2 million units. Sales in the company's Mobile Internet and Digital Home product line (which includes phones, tablets, and smart TVs) soared by 71 percent to $1.3 billion from a year ago, grabbing 13 percent of overall revenue.

Last quarter was the fourth one in a row in which Lenovo sold more smartphones and tablets than PCs.

"The record sales and profits that we delivered last year prove that Lenovo can grow and deliver its commitments, no matter the market conditions," Lenovo Chairman and CEO Yuanqing Yang said in a statement. "Not only did we strengthen our leading position in PCs, but we gained three points in tablets by quadrupling sales volume and became the fastest growing major smartphone company in the world. This demonstrates our capability to manage both businesses that are already mature, as well as those that are shifting to maturity."

Still, the company may face some rough waters ahead. Lenovo's acquisitions of Motorola Mobility and IBM's x86 server business didn't have any material effect on the latest earnings. However, those new businesses may not start to turn a profit until the end of 2014, according to analysts cited by Reuters.

And on the smartphone end, Apple and Samsung will continue to increase the competition with new devices as Lenovo looks to grow its market share even further around the world.