One of the biggest computer companies of the world, Lenovo, has reported a twenty five percent jump in earnings due to a stronger Yuan and lower component costs.

Net profit of the firm was in the tune of $99.6m (£61.8m) in the three months that ended in December, up from seventy nine and half million dollars in the same quarter one year earlier.

Most analysts think that the net profit will come in at close to eighty six million dollars.

Nevertheless the company further said that growth may now slow due to economic uncertainty in the US and Europe.

Worldwide growth in PC market has further gone down in the quarter, and certain challenges in the global economy and the debt crisis in mature markets remain, as stated by Lenovo.

The PC or the personal computer industry has seen weaker consumer demand in its main markets in recent months.

But Lenovo has been helped by faster sales growth in newer, less developed markets.

Sales in China rose by eighteen percent in the quarter. In the US and Europe they were up by twenty two percent.

In comparison sales of the firm in developing markets increased thirty four percent.

The results of Lenovo come a day after its bigger rival Dell Inc (DELL. O) reported forecast-beating earnings and margins on lower component costs and demand from companies replacing older technology.

Lenovo shares extended profits after the results and climbed up 4.1 percent by 0640 GMT in a steady market .HSI.

Operating profit margin, a key performance indicator in assessing profitability, went up by 2.2 percent from 1.9 percent in the previous quarter, increasing Lenovo's earnings.

Such small margins have compelled PC brands to look for acquisitions and alliances with rivals. Last month, Lenovo signed a one hundred and seventy five million dollar worth agreement with NEC Corp (6701. T) to sell and develop PCs in Japan, jointly.