By Daniel Hunter

The world's biggest PC manufacturer, Lenovo, has beaten expectations in its profits for the end of 2014.

Lenovo reported profits of $253m (£168m) in the final three months of the year, against market expectations of $200m. Revenues were up 31% to $14.1bn on strong smartphone sales.

It comes after Lenovo bought Motorola and IBM's low-end server unit last year to branch out from PCs and laptops.

Lenovo's chairman and chief executive, Yuanqing Yang, said: "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.

"Our core PC business maintained its leading position and further improved profitability. The two newly acquired businesses are achieving great momentum in their first quarter of integration. They are definitely becoming our growth engines."

Lenovo's shares were up 8% in Hong Kong after the results.

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