Huawei’s nine-month revenue growth slows due to US restrictions

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Chinese company Huawei Technologies Co Ltd on Friday announced a 9.9% nine-month revenue increase as US export restrictions and the global COVID-19 pandemic weakened sales growth in products such as smartphones and telecommunications equipment.

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Revenue reached 671.3 billion yuan ($ 100.44 billion) between January and September, he said in a statement, without providing a breakdown by segment. Income increased 13% between January and June.

The net profit margin for the nine months is 8.0%, compared to 8.7% for the same period a year earlier.

Earlier this year, Consumer Business Group chief executive Richard Yu said Huawei would soon stop making high-end Kirin chips as U.S. restrictions on the company’s supply come into effect. Analysts expect its chip supply to run out next year.

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Domestically, consumers have been rushing to buy Huawei smartphones over concerns about the availability of newer models.

Overseas, however, Huawei has faced slow sales, in part due to its lack of access to Alphabet Inc.’s Google mobile services.

Last week, Reuters reported that Huawei was in talks with Digital China Group Co Ltd and others to sell part of its budget smartphone business Honor in a deal that could reach 25 billion yuan.

Huawei is also facing pressure overseas in its telecommunications infrastructure business. This week, Sweden announced that it will block Huawei and its Chinese rival ZTE Corp from serving its upcoming fifth generation (5G) network.

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($ 1 = 6.6837 Chinese renminbi yuan)

(Reporting by David Kirton in Shenzhen and Josh Horwitz and Brenda Goh in Shanghai; Editing by Miyoung Kim and Christopher Cushing)

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