China’s Lenovo has announced its net profit grew 29 percent for the business year that just ended, to the equivalent of 597.5 million euros.

Lenovo is now the world’s fourth-biggest seller of smartphones, and it was strong phone sales that boosted its earnings, countering weak growth in China from a decline in sales of its once-mainstay personal computers.

The company – which became a global brand in 2005 after purchasing the PC unit of International Business Machines – is buying Google’s Motorola Mobility smartphone unit for $2.9 billion (2.12 billion euros) and IBM’s low-end computer server division for $2.3 billion (1.68 billion euros).

Analysts see tough times ahead for Lenovo, saying it may take at least until the end of this year to make those acquisitions profitable.

Chief Executive Yang Yuanqing said the acquisitions would weigh on finances in the near term.

with Reuters