Huawei revenue slumps in third quarter as smartphone business remains crippled

By David Kirton

SHENZHEN, China (Reuters) – Chinese firm Huawei Technologies Co Ltd’s revenue fell 38% in the third quarter compared to the same period a year earlier as US sanctions hampered its smartphone and mobile business. new areas of potential growth still in their infancy.

The Chinese telecoms giant on Friday reported sales of 455.8 billion yuan ($ 71.32 billion) for the first three quarters, down nearly a third from the same period a year earlier, with a profit margin of 10.2%.

Revenue for the third quarter alone was 135.4 billion yuan, according to Reuters calculations.

The performance was “according to plan,” said rotating chairman Guo Ping.

Former US President Donald Trump blacklisted Huawei for export in 2019 and barred it from accessing critical US-sourced technology, hampering its ability to design its own source chips and components from suppliers exterior.

The restrictions have severely hampered Huawei’s handset business, with rotating chairman Eric Xu saying in September that smartphone revenues will fall by around $ 30 billion to $ 40 billion this year.

Although Huawei did not break down its third quarter figures by business segment, the company said the decline was mainly due to its consumer business.

Huawei occupied 8% of the smartphone market share in China in the third quarter, up from 30% a year earlier when it was the market leader, according to Counterpoint Research.

On the other hand, Honor, formerly a sub-brand that Huawei sold to keep it alive last November, sold 96% more phones in the same quarter compared to the previous year, taking over 15% of the Chinese market, Counterpoint said.

Huawei is looking to develop new sources of growth revenue outside of base station and handset infrastructure, with cloud business and smart ports, mining, and smart electric vehicle businesses.

In June, it launched its Harmony operating system on smartphones and is looking to provide software to automakers.

But these new lines will take some time to bear fruit, the executives said.

However, the company benefited from the return of its CFO and daughter of its founder Ren Zhengfei. Meng Wanzhou returned to work at her headquarters on Monday after nearly three years of fighting extradition to the United States in Canada, with Chinese officials reporting the case against her was dropped to help end a deadlock diplomatic.

($ 1 = 6.3910 yuan Chinese renminbi)

(Reporting by David Kirton; Editing by Christopher Cushing)

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