BEIJING (Reuters) -China's Xiaomi Corp on Wednesday reported higher-than-expected revenue for the second quarter, revealing for the first time its auto business unit's contribution of 6.2 billion yuan ($869.2 million).

For the three months ending in June, Xiaomi's revenue rose 32% to 88.9 billion yuan, beating the 85.8 billion yuan estimated by analysts, according to LSEG.

The company first announced its entry into the EV business in 2021 as a diversification from its core smartphone operations.

Xiaomi started shipping its SU7 electric vehicles in early April after announcing it would price its SU7 models competitively against Tesla's offerings.

It delivered 27,307 EVs in the second quarter, generating 6.2 billion yuan in revenue. This is its first financial report to include details of its auto business segment.

In a media call following the earnings report, Xiaomi's President Lu Weibing said he is "confident" the company will reach its target of delivering 120,000 electric vehicles by year-end

Since June, Xiaomi has implemented double-shift measures to ensure monthly deliveries exceed 10,000 units.

Xiaomi's auto business is still operating at a loss. The unit reported an adjusted loss of 1.8 billion yuan for the quarter, with a gross profit margin of 15.4%.

Lu said that as deliveries ramp up, the unit's profitability is expected to improve over time.

The global smartphone market has shown signs of a recovery since late last year after a prolonged period of sluggishness.

Xiaomi's global smartphone shipments rose 27.4% to 42.3 million units in the second quarter, helping the company capture a 14.8% market share and placing it in the No. 3 position, according to industry research firm IDC.

In China, Xiaomi's largest market for its smartphone business, shipments rose 16.5%, according to IDC.

Adjusted net income was 6.18 billion yuan, above the 4.8 billion yuan estimated by analysts.

($1 = 7.1330 Chinese yuan renminbi)

(Reporting by Liam Mo and Casey Hall; Editing by Louise Heavens and Jan Harvey)