Huawei's First-Half Revenue Up 40%
July 24 2016 - 11:30PM
Dow Jones News
HONG KONG—Huawei Technologies Co. reported Monday that its
revenue rose 40% in the first half of the year, but its operating
margin shrank as the Chinese technology giant increased investment
for its smartphone business.
The world's third-largest smartphone maker by sales behind
Samsung Electronics Co and Apple Inc. is trying to challenge the
two giants not only in China but increasingly in overseas markets
such as Europe and the Middle East.
Huawei, which makes handsets as well as networking equipment
such as base stations, said its revenue for the six months through
June rose to 245.5 billion yuan ($36.67 billion) from 175.9 billion
yuan in the same period last year, while its operating margin
shrank to 12% from 18% in the first six months of 2015. Huawei
didn't disclose its net profit.
"The modest reduction in operating margin during the period is
mostly the result of increased investment to support future
growth," a Huawei spokesman said.
Still, Huawei grew at a faster pace than last year—its revenue
growth in the first half of 2015 was up 30% from the same period in
2014.
"We are confident that Huawei will maintain its current
momentum, and round out the full year in a positive financial
position backed by sound ongoing operations," Huawei Chief
Financial Officer Sabrina Meng said in a news release.
The results came as demand for network upgrades at
telecommunications carriers are slowing, with more clients already
using fourth-generation wireless networks.
Still, Huawei has been trying to sell more software and services
to carriers that have already installed base stations and other
hardware equipment. Such efforts appear to be paying off as
Huawei's revenue from its business for carriers continues to grow,
analysts said.
Huawei didn't disclose a revenue breakdown by business
segment.
The company's smartphone business has been growing rapidly over
the past few years as it expands in European markets such as Italy
and Spain as well as the Middle East, Africa and Latin America.
In the first quarter, Huawei's smartphone sales grew 59% to more
than 28 million units, while its global market share increased to
8.3% from 5.4% a year earlier, according to data from research firm
Gartner. Samsung's market share in the quarter was 23%, followed by
Apple's 15%.
Despite its expansion in many parts of the world, Huawei has
struggled to build a foothold in the U.S., where its
networking-equipment business has effectively been banned after a
2012 congressional report recommended that U.S. carriers avoid
using the Chinese firm's gear on concerns it could be used by
Beijing to spy on Americans. Huawei has denied the allegations.
Huawei's smartphone business also has only a minor presence in
the U.S., where it has sold some handsets online.
Write to Wayne Ma at wayne.ma@wsj.com and Juro Osawa at
juro.osawa@wsj.com
(END) Dow Jones Newswires
July 24, 2016 23:15 ET (03:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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