Huawei revenue shrinks by 16.5% in first quarter

Huawei Technologies Co said its revenue declined by 16.5 percent to 152.2 billion yuan ($23.5 billion)during the first quarter.

However, the tech giant said the second quarterly decline in revenue was in line with earlier forecasts. Huawei had earlier posted an 11 percent decline in revenue for the three months that ended in December.

The company said its net profit margin rose by 3.8 percentage points on a yearly basis to 11.1 percent during the first three months of the year, primarily as a result of its ongoing efforts to improve the quality of operations and management efficiency, as well as patent royalty income of $600 million.

The revenue decline came amid United States and other government restrictions on the company, which has badly hurt its smartphone business. Huawei said its network business continued to maintain steady growth, while revenue from the consumer business declined, partly due to sales of the Honor smart device brand in November.

Xu Zhijun, Huawei's rotating chairman, said:"2021 will be another challenging year for us, but it's also the year that our future development strategy will begin to take shape.

"We thank our customers and partners for their ongoing trust. No matter what challenges come in our way, we will continue to maintain our business resilience. Not just to survive, but to do so sustainably. As always, we will remain focused on the needs of our customers and keep delivering practical business value."

Huawei said it is stepping up the efforts to fully unleash the value of 5G.It is helping carriers around the world roll out their 5G networks, meet the demands of consumers and industries alike, while boosting its own delivery efficiency. It will continue to improve its software engineering capabilities and ramp up investment in the software sector to gradually increase the proportion of software and services in its total revenue mix.

Xu said: "As always, we remain committed to technological innovation and investing heavily in research and development as we work to address supply continuity challenges caused by restrictions in the market. We will continue making breakthroughs in basic science and pushing the frontiers of technology."

Amid the mounting US government restrictions, Huawei has been ramping up efforts to explore the Chinese market, including sustained efforts to expand its local cloud computing business and smart photovoltaic solutions, to help Chinese enterprises cut their carbon footprint.

Huawei is also stepping up investment in autonomous driving technologies, including software and intelligent car components, as the Chinese tech giant aims to seek new growth points.

Nicole Peng, vice-president of mobility at Canalys, said earlier that when it comes to the smartphone business, it is possibly Huawei's toughest time as it is restrained in even serving its home market.

"Huawei's sell-in shipments during the fourth quarter of last year shrunk by nearly 50 percent sequentially, despite huge demand for Huawei devices, as the company is not able to fulfill the demand in the foreseeable future."