China’s Huawei Technologies Co Ltd reported a meagre 3.7 per cent rise in quarterly revenue on Friday, ending the double-digit growth run it enjoyed earlier this year. January-September revenue reached 671.3 billion Yuan (77 billion pounds), Huawei said in a statement, without providing a segment breakdown.
That represented a 9.9 per cent increase compared with the same period last year. For the third quarter alone, revenue reached 217.3 billion Yuan, versus 209.5 billion Yuan a year earlier, Reuters’ calculations showed. Net profit margin for the nine months was 8.0 per cent, versus 8.7 per cent over the same period a year earlier, Huawei said.
The slowdown comes as U.S. export restrictions and the global COVID-19 pandemic weakened sales growth in products such as smartphones and telecoms equipment. Consumer Business Group Chief Executive Richard Yu earlier this year said Huawei would soon stop making high-end Kirin chips as U.S. restrictions on supplying the firm take effect.
Analysts expect its stockpile of the chips to run out next year. Domestically, consumers have rushed to buy Huawei smartphones on concerns over the availability of newer models. Overseas, however, Huawei has faced sluggish sales, due in part to U.S. restrictions blocking its access to Alphabet Inc’s Google Mobile Services.
Last week, Reuters reported that Huawei is in talks with Digital China Group Co Ltd and others to sell parts of its Honour budget brand smartphone business in a deal that could fetch up to 25 billion Yuan.
Huawei also faces pressure abroad in its telecommunications infrastructure business. This week, Sweden said it would restrict Huawei and Chinese rival ZTE Corpfrom servicing its upcoming fifth-generation (5G) network.
