Lenovo stays in black despite Motorola buy

Pedestrians walk past a store of Lenovo in Shanghai, on Feb 21, 2013. [Photo/IC]

Lenovo Group Ltd said on Tuesday it had dodged a widely expected profit slump in the fourth quarter, after its acquisition of Motorola Mobility LLP at the turn of the year.

The world's largest personal computer maker released a longer-than-normal financial report for the October-December period because two major acquisitions, valued at more than $5 billion, were completed during the three months.

Net income generated from daily operations, mainly PC, server and smartphone sales, hit $327 million, up by 23 percent year-on-year, according to Yang Yuanqing, chairman and chief executive.

The figure countered earlier analyst estimates that had suggested buying the previously money-bleeding Motorola unit from Google Inc would only result in many quarters of poor performance.

Even though net income, after deducting merger-related accounting charges, was down by 5 percent compared to a year ago, Yang hailed the quarter as "extremely successful".

"We are at the starting line of a new race, but the results show that we have the right strategy, we made the right acquisitions and we executed well globally, so I am confident we are ready to win," he said.

The better-than-expected result sent shares in the Hong Kong-listed company 7.3 percent higher on Tuesday.

Strong PC and Motorola smartphone sales pushed total revenue to $14.1 billion in the period, a 31 percent jump year-on-year, the financial report showed.

Motorola is showing strong signs of a comeback since the Chinese company completed its $2.9 billion acquisition late last year. Globally, the company shipped more than 10 million devices in the fourth quarter, a 118 percent rise year-on-year.

Liu Jun, Lenovo's senior vice-president who also oversees mobility business, said orders of Motorola phones have exceeded 1.3 million units in the country so far.