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Lenovo Q2 Profit Climbs, but Revenue Disappoints

The company also named Yahoo co-founder Jerry Yang to its board.

Reuters / Aly Song

Lenovo Group, the world’s biggest maker of personal computers, reported a 19 percent jump in net income in the second fiscal quarter, but revenue fell short of analyst expectations, sending shares lower.

The company, which has been muscling its way into the smartphone market, said quarterly revenue rose seven percent to $10.5 billion, but sales from its mobile device division fell six percent to $1.4 billion.

Shares of Lenovo shed 2.46 percent in Thursday afternoon trade, compared with a 0.1 percent decline in the benchmark Hang Seng index.

Still, the Beijing-based company tightened its hold over global PC sales even as the broader market shrank. Sales of both laptops and desktop computers rose 0.9 percent and 6.4 percent, respectively.

Net income was $262 million, exceeding the $260 million expected by analysts, according to Thomson Reuters SmartEstimates.

The company also announced a dividend payment of HK$0.06 ($0.0077) per share to stockholders.

Lenovo is now ramping up its assault on new product markets after recently closing two multi-billion-dollar acquisitions, for IBM’s low-end server business and Google’s Motorola handset unit.

The company additionally named Jerry Yang, the Yahoo co-founder, to its board of directors. Yang, who is also an Alibaba Group Holding director, formerly served as a Lenovo board observer.

(Reporting by Gerry Shih; Editing by Christopher Cushing)

This article originally appeared on Recode.net.