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The Huawei headquarters building is displayed in Reading, Britain, on July 14, 2020.
Matthew Childs | Reuters
GUANGZHOU, China – Huawei’s revenue growth slowed drastically in the third quarter, while its margin narrowed as U.S. sanctions disrupted its business.
Revenues for the September quarter were 217.3 billion yuan ($ 31.91 billion), an increase of just 3.7% from the 209.5 billion yuan recorded in the same period last year. past.
During the first nine months of the year, revenue totaled 671.3 billion yuan ($ 98.57 billion), 9.9% more than the 610.8 billion yuan reported in the same period last year. . That is a significant growth slowdown. In the first nine months of 2019, Huawei’s revenue growth was 24.4%
Meanwhile, Huawei’s net profit margin was 8% for the first nine months of the year, up from 8.7% in the same period last year.
Washington’s sanctions are clearly hurting the Chinese tech giant. Last year, Huawei was included on a US export blacklist known as the Entity List. Google cut ties with Huawei, which means that the Chinese company’s smartphones would no longer be able to use the licensed Android mobile operating system software. That has affected Huawei’s smartphone sales outside of China, while its domestic market has thrived.
Huawei did not release a breakdown of the parts of its business that contributed to revenue growth. Earlier this year, Huawei said its consumer business, which includes its smartphones, was responsible for nearly all of the $ 12 billion shortfall in revenue it saw in 2019 against its own targets.
For the first three quarters of 2020, Huawei said the results “basically met expectations.”
“As the world grapples with COVID-19, Huawei’s global supply chain came under intense pressure and its production and operations experienced increasing difficulties,” the company said in a press release.
“During the launch, the company stated that it would do everything possible to find solutions, survive and move forward, and meet its obligations to customers and suppliers.”
Huawei now faces even bigger challenges. Earlier this year, Washington imposed new sanctions on Huawei, which has threatened to cut off semiconductor supplies from its main supplier TSMC. This could cripple its smartphone business, analysts previously told CNBC. Huawei has very few options to get around these sanctions.
