Huawei Felt Heavy Hit by US Sanctions in the First Quarter
Huawei felt the full impact of US trade restrictions during the first quarter of 2021. The company’s device unit is weighing heavily on its top-line and offsetting steady growth in its core network business.
In its earnings statement, rotating chairman Eric Xu noted 2021 would be a challenging year, but one in which Huawei’s future strategy will begin to take shape. “We remain committed to technological innovation and investing heavily in R&D as we work to address supply continuity challenges caused by restrictions in the market,” Xu said.
Revenue dropped 16.5% year-on-year to CNY152.2 billion ($23.5 billion) in the period, while its profit margin increased 3.8 percentage points to 11.1% on improvements in operations and management efficiency, along with increased patent royalty income. The company didn’t reveal net profit or break out revenue by business group, but noted its Consumer Business Group’s revenue was hit by offloading its Honor brand in November 2020.