Huawei’s “resilient” Q1-2020 results and coronavirus commentary

Undaunted by the U.S. campaign to ban its network equipment and smart phones, Huawei reported results for the first quarter 2020 that were in line with expectations, despite the effects of the coronavirus pandemic. The company said its business is continuing to grow, albeit at a slower pace.

Revenue in the first quarter rose by about 1% to 182.2 billion yuan ($25.72 billion), vemart phones, China tech giant rsus a 39% growth posted a year ago. Its net profit margin over the period narrowed to 7.3% from about 8% a year ago.  Huawei being a privately owned company did not disclose its net profits.

“The growth rate has slowed, but this is also a resilient performance in the face of both the entity list and the coronavirus we are facing at this moment,” Vice President Victor Zhang said in a statement on Tuesday.

This represents a significant slowdown from the 19 percent sales growth for 2019. The company earlier stated that 2020 would be a very difficult year, its first full year with U.S. sanctions. Along with the effects of the coronavirus outbreak, 2020 “will be the most difficult year” for Huawei, rotating chairman Eric Xu said.

Huawei to supply equipment for 5G network in UK

As for the impact from the coronavirus pandemic, Zhang said it was difficult to gauge what that would be in the short or long term, as he presented the results from London rather than Huawei’s Shenzen base to mark 20 years of business in Europe.

The company provided enlightening comments on the coronavirus in its earlier referenced statement:

Networks are a lifeline for people from all walks of life during this public health crisis, so ensuring normal network operations is of paramount importance. Huawei is doing everything in its capabilities to help carriers ensure stable and secure network operations. Together, we are working to meet the network demand created by social distancing as people switch to telecommuting, distance education, and e-commerce for daily necessities.

Since the outbreak, Huawei and its partners have rapidly launched many 5G- and AI-powered medical applications. We are using our expertise in communications technologies to help fight the pandemic and save more lives. The AI-assisted coronavirus diagnosis solution cuts CT scan review times from 12 minutes down to 2, helping doctors improve their diagnostic efficiency. 5G-enabled remote video consultation helps mitigate shortages of frontline experts and increases the efficiency of diagnosis and treatment of critical patients. AI-powered thermal imaging devices can take temperatures, increasing the efficiency of infection prevention and control in public places. In addition, Huawei has been doing its best to get masks, test kits, and other protective supplies to the countries and organizations that need them.

A seed that survives the storm will sprout and then blossom. Even though it is impossible to know when the tides of this pandemic will turn, we at Huawei believe that this challenge will be overcome by standing together.

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In March, Huawei reported financial results for 2019, recording  a $12 billion revenue shortfall that it attributed to the entity listing, which effectively blacklisted Huawei and numerous affiliates by restricting sales of certain products from U.S. suppliers to the vendor.

Huawei’s consumer segment was particularly hit by the U.S restrictions in the second half of last year. As one of the world’s largest smartphone makers, Huawei was unable to access Google’s proprietary Android operating system and was forced to launch new devices without access to the popular Google Play store.

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References:

https://www.huawei.com/en/press-events/news/2020/4/huawei-announces-q1-2020-business-results

https://www.reuters.com/article/us-huawei-tech-results/huawei-first-quarter-revenue-growth-slows-sharply-amid-us-ban-virus-headwinds-idUSKBN2230WV

 

2 thoughts on “Huawei’s “resilient” Q1-2020 results and coronavirus commentary

  1. Trump Extends Huawei Ban:
    President Trump inked an extension to the US government’s ban on American companies’ business with China’s Huawei. The move essentially prevents US companies from doing business with Huawei through May 2021.

    As Reuters reported, the action invokes the International Emergency Economic Powers Act, positioning China’s Huawei and ZTE as threats to national security. According to Reuters, the US Commerce Department is also preparing to extend the waivers it has provided to select US companies that will allow them to continue working with Huawei.

    Hanging over the situation is the ongoing US-China trade war, a situation now further complicated by the COVID-19 pandemic that originated in China.

    Trump’s action is noteworthy in light of a number of new developments, including reports that US companies may be given a green light to work with Huawei and other Chinese companies on 5G standards. And, separately, there are ongoing discussions about a government-funded program to pull Huawei equipment out of some US wireless operator networks and replace it with equipment from “trusted” suppliers.

    https://www.lightreading.com/security/trump-extends-huawei-ban-to-may-2021/d/d-id/759625?

  2. Your post is very informative and important as Huawei is the leader in network equipment and 5G base stations in addition to being the second largest smartphone maker. Thank you.

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