Chinese telecommunications equipment maker Huawei reported Wednesday that its revenue for the first quarter fell 16.5% year on year, in the company’s largest quarterly top-line decrease since US export restrictions took hold.
Why it matters: The decrease in revenue reflects the toll that US sanctions have taken on a company that was once the world’s largest smartphone maker.
- US sanctions imposed in 2020 and 2019 barred Huawei from access to critical semiconductors it needs to produce consumer products. The company was also banned from using Google’s Android mobile operating system, which heavily dented the appeal of its smartphone offerings in overseas markets.
Details: Huawei said in a statement Wednesday that its revenue for the first quarter of this year was RMB 152.2 billion (around $23.5 billion), a year-on-year decrease of 16.5%.
- The company said the results were “in line with forecast.”
- Net profit in the quarter was RMB 16.7 billion, up from RMB 13.3 billion in the same quarter last year.
- “2021 will be another challenging year for us, but it’s also the year that our future development strategy will begin to take shape,” said Eric Xu, Huawei’s rotating chairman.
- “No matter what challenges come our way, we will continue to maintain our business resilience. Not just to survive, but do so sustainably,” Xu said in the statement.
Context: Huawei said earlier this month that its revenue for 2020 reached RMB 891.4 billion, up 3.8% year on year, but slower than the annual growth rate of 19.1% in 2019.
- The company saw revenue growth from its consumer business—which includes smartphones, tablets, and computers—fall sharply. Growth in this segment fell to 3.3% last year from 34% in 2019.
- Huawei’s revenue for the fourth quarter of 2020 fell 11% year on year to RMB 220.1 billion—the first time on record that its quarterly revenue contracted.