Huawei posts first-ever yearly revenue decline as U.S. sanctions continue to bite, but profit surges

Huawei posts first-ever yearly revenue decline as U.S. sanctions continue to bite, but profit surges


Huawei reported its first yearly revenue decline on record in 2021 as U.S. sanctions continued to hurt the company.

But the Chinese technology giant’s income surged last year as it focused on boosting profitability.

“Despite a revenue decline in 2021, our ability to make a profit and generate cash flows is increasing, and we are more capable of dealing with uncertainty,” Huawei’s chief financial officer, Meng Wanzhou, said in a statement.

Huawei’s annual report released Monday is the first high-profile corporate event Meng has led since returning to China from Canada, where she was engaged in a nearly three-year extradition battle with the United States. Meng spoke at a press conference at Huawei’s headquarters in Shenzhen.

In 2021, Huawei brought in revenue of 636.8 billion Chinese yuan ($99.9 billion), a 28.5% year-on-year decline. That is the first yearly decline in revenue based on publicly available reports dating back to 2002.

Meng said during a press conference on Monday that U.S. sanctions, “supply continuity challenges” and slowing 5G demand in China were key reasons behind the revenue fall.

Net profit last year rose 75.9% year on year to 113.7 billion yuan.

Under former U.S. President Donald Trump, Huawei was put on a U.S. blacklist called the Entity List which restricted American firms from exporting key components and software to the company. Washington has sought to cut Huawei’s access to high-end chips required for its smartphones and other hardware. Huawei’s smartphone market share globally has plunged as a result.

Meanwhile, the U.S. has called Huawei a national security threat and urged other nations not to use its telecommunication equipment for next-generation 5G mobile networks. Huawei has repeatedly denied it is a national security threat.

These moves had had a big impact on the company’s business units. Huawei’s consumer division, which houses smartphone sales and other products, brought in 243.4 billion yuan in 2021, down nearly 50% year on year.

The carrier business, which includes sales of telecommunications equipment, posted revenue of 281.5 billion yuan, down by around 7% year on year.

One bright spot for the company was its nascent enterprise business, its smallest division currently, but one Huawei is focusing heavily on to pick up the slack. Huawei’s enterprise unit includes cloud computing.

To counter U.S. sanctions, Huawei is investing heavily in new areas including the automotive industry and hiring more scientists to focus on technology development.

Huawei’s spent 142.7 billion yuan on research and development in 2021, slightly higher than 2020’s figure of 141.9 billion yuan.

“Relying on talent, scientific research, and an innovative spirit, we will continuously increase investment to reshape our paradigms for fundamental theories, architecture, and software, and build our long-term competitiveness,” Guo Ping, Huawei’s rotating chairman, said in a press release.

Huawei is not a public company but releases annual results which it says are audited by accounting firm KPMG.



Source

Harvard-trained educator: Kids who learn how to use AI will become smarter adults—if they avoid this No. 1 mistake
World

Harvard-trained educator: Kids who learn how to use AI will become smarter adults—if they avoid this No. 1 mistake

Students that copy and paste ChatGPT answers into their assignments, with little thinking involved, are doing themselves a disservice — especially because artificial intelligence really can help students become better learners, according to psychologist and author Angela Duckworth. Instead of distrusting AI, show kids how to properly use it, Duckworth advised in a speech at […]

Read More
U.S. judge prevents Trump from invalidating 5,000 Venezuelans’ legal documents
World

U.S. judge prevents Trump from invalidating 5,000 Venezuelans’ legal documents

U.S. military personnel escort alleged members of the Venezuelan gang Tren de Aragua and the MS-13 gang recently deported by the U.S. government to be imprisoned in the Terrorism Confinement Center (CECOT) prison, as part of an agreement with the Salvadoran government, in San Luis Talpa, El Salvador, in this handout image obtained March 31, […]

Read More
Saylor’s bitcoin buying strategy is ‘exploding’ globally, but Wall Street is skeptical
World

Saylor’s bitcoin buying strategy is ‘exploding’ globally, but Wall Street is skeptical

LAS VEGAS — The bitcoin treasury play that lifted Strategy’s market cap past $80 billion is now being mimicked by meme stock companies, media firms, and multinational conglomerates. But Wall Street isn’t buying all the hype. This week, Trump Media announced plans to raise $2.5 billion to buy bitcoin, and GameStop revealed a $500 million […]

Read More