Aug. 19 (Bloomberg) -- Lenovo Group Ltd., China’s biggest maker of personal-computers, posted fiscal first-quarter profit that missed analysts’ estimates after the company offered cheaper products and raised marketing spending to boost sales.

Net income in the three months to June 30 was $54.9 million, or 0.54 cent a share, compared with a loss of $16 million, or 0.18 cent, a year earlier, Lenovo said in a statement today. The computer maker was expected to post a $59.8 million profit, according to the average of six analysts’ estimates compiled by Bloomberg.

Sales jumped 50 percent to $5.15 billion as Lenovo followed Hewlett-Packard Co. and Acer Inc. in making more low-priced products to win customers in emerging markets. That eroded earnings from its premium Thinkpad laptop range, while the company spent more on marketing to raise mobile-phone sales as competition intensified in the computer market.

“The company is giving up a bit of its short-term profitability to acquire market share,” Steven Zhang, who rates Lenovo shares “fully valued” at DBS Vickers Ltd. in Hong Kong, said before the announcement.

Lenovo fell 2.5 percent to HK$4.67 as of 10:45 a.m. in Hong Kong trading, compared with a 0.3 percent gain by the city’s benchmark Hang Seng Index. The stock has dropped 3.9 percent this year.

Emerging Markets Revenue

Sales from China rose 50 percent to $2.51 billion, or 49 percent of the company’s total, Lenovo said. Revenue from its emerging markets division, which includes sales in India, Brazil and Russia, rose 80 percent to $821 million, according to the Raleigh, North Carolina-based company.

The company’s gross profit margin faces “downward pressure” because of the plan to expand sales in emerging markets, Chief Financial Officer Wong Wai Ming said on a conference call today.

Lenovo said in May it will sell a new desktop computer priced from $249, after the company began offering a laptop for $379 the previous month. The Chinese computer maker typically sells its Thinkpad laptops at more than $500.

Research and development spending rose 56 percent last quarter, Lenovo said. The company started selling its LePhone smartphone in China in May.

The Chinese company, which moved its headquarters to the U.S. after buying the PC division of International Business Machines Corp. in 2005, said the cost of goods rose 51 percent last quarter.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net.

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.