Huawei revenue drops 32 per cent in first nine months as US sanctions cripple its once lucrative smartphone business

Huawei Technologies Co, the Chinese telecommunications and smartphone giant, reported a 32 per cent slump in sales for the first nine months of 2021, deepening a 29.4 per cent decline in the first half, as the company’s handset business was crippled by US sanctions.

Huawei, which is private but releases some financial data periodically, said it generated revenue of 455.8 billion yuan (US$71.2 billion) in the first nine months of 2021, almost a third less than the 671.3 billion yuan it posted in the same period last year. Its net profit margin was 10.2 per cent for the three quarters, up from 8 per cent in the same period last year, and 9.8 per cent for the first half of 2021.

Guo Ping, Huawei’s rotating chairman, said the company’s performance was in line with expectations.

“Through our ongoing commitment to innovation, R&D, and talent acquisition, and rigorous attention to operating efficiency, we are confident we will continue to create practical value for our customers and the communities in which we work,” Guo said in a statement.

The latest business results for Huawei, the world’s largest telecoms equipment maker and formerly China’s biggest smartphone vendor, came as the company struggles to overcome the impact of US sanctions, which cut off its access to advanced chips.

Huawei is quickly losing relevance in China’s smartphone market. In November last year, Huawei sold its budget smartphone business Honor to a consortium of more than 30 dealers and agents of the brand. That allowed Honor to break free of the US trade restrictions imposed on its former parent company.