Huawei’s Revenue Growth Slowed Sharply by Coronavirus, U.S. Blacklisting
Revenue rose 1.4%, a slowdown from the 39% growth it reported in the same quarter a year ago
HONG KONG—Huawei Technologies Co.’s revenue growth slowed sharply in the first quarter, the Chinese telecom giant said, as it contended with the effects of the coronavirus pandemic and a U.S. supplier blacklisting.
Revenue rose 1.4% to 182.2 billion yuan, or about $25.8 billion, from the same quarter a year ago, the company said. The climb was a slowdown from the 39% growth it reported in the same quarter a year ago.
Huawei’s revenue and profit have been squeezed since the Commerce Department added the company to its “entity list” on national security grounds in May. The move barred Huawei from obtaining large amounts of U.S. technology, forcing it to reroute supply chains and curbing sales of its smartphones in overseas markets.
At the same time, the economic freeze from the pandemic has further damaged sales and delayed 5G network rollouts.
The Shenzhen-based company is privately owned and self-selects the financial figures it discloses. For the first quarter, Huawei didn’t release a net-profit figure and declined to offer details of its sales of smartphones or telecom equipment, its biggest business lines. Net profit margin fell to 7.3% from 8% in the first quarter last year, the company said.
“While the rate of growth has slowed, it was a resilient performance in the face of the entity list and the coronavirus,” said Victor Zhang, a Huawei vice president based in London.
Washington officials have long regarded Huawei as a security threat and have leaned on allies to shun the Chinese company’s 5G equipment. Huawei says it would never spy for any government. The company faces the prospect of further limits from Washington, including a proposal to block access to a Taiwanese chip manufacturer.
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