TAIPEI, TAIWAN: Lenovo, the world's No.4 PC brand, on Thursday blew past market expectations for quarterly profit on strong China sales, recording its first profit after three straight quarters of losses as technology spending rebounded.

Lenovo's results top off a string of better-than-expected results from peers such as Microsoft and Google, reaffirming a return in technology demand and raising hopes that consumer and corporate spending is picking up again.

Lenovo reported a $53.08 billion net profit for July-September, beating market expectations for $24.5 million, according to a poll by Thomson Reuters I/B/E/S.

It was also almost double the $23.4 million net profit reported for the same period a year earlier. Quarterly revenue fell about 5 per cent to $4.1 billion, as corporate demand remained crippled.

"Lenovo expects the market environment (to) continue to pose challenges for the group during the second half of the fiscal year as commercial demand remains soft," the company said in a statement filed to the Hong Kong stock exchange.

Lenovo, which is cutting jobs and consolidating its divisions, has been one of the main beneficiaries of China's move to encourage consumer spending.

China again provided the biggest chunk of Lenovo's revenue, accounting for 49 per cent of total sales, slightly higher than the 48 per cent reported in the previous quarter.

The result comes even as rivals such as Dell, Acer and Asustek aim to expand in China and step up marketing efforts.

Lenovo remains the biggest PC brand in China by market share, according to research firm IDC, taking a 28 per cent share and ranking ahead of larger global rivals HP and Dell.

It has also been the biggest beneficiary of China's massive $600 billion stimulus package announced earlier this year, which saw government-backed programmes encourage the public-sector and rural consumers to buy electronic products.

The company's results came after the Hong Kong stock exchange closed on Thursday. Its shares were up 1.37 per cent in a broader market.

Lenovo's shares have more than doubled this year, easily outpacing a 50 per cent raise for the Hang Seng Index .HSI, on hopes the company will return to profit as it seeks to return to its roots as a specialist in developing markets.

Lenovo CFO Wong Wai Ming said the company sees gross profit margins stabilising at current levels and improving when the market improves. He made the remark in a telephone conference after announcing the quarterly profit.