Huawei's Q1 revenue slides 17% as US sanctions bite

The Shenzhen-based telecoms manufacturer said it will maintain its 'business resilience' despite market challenges

Visitors walk past a logo at the Huawei booth at the Auto Shanghai 2021 show in Shanghai. The company has an 8 per cent market share in the smartphone manufacturing segment, according to Counterpoint Show more

Huawei, China's largest technology company, posted a 17 per cent drop in first quarter revenue on lower smartphone sales, operational difficulties caused by the Covid-19 pandemic and the impact of US sanctions.

The Shenzhen-based telecoms manufacturer’s revenue for the January-March period reached $23.17 billion, the company said in a statement on Wednesday. Its net profit margin during this period was 3.8 per cent.

Huawei did not disclose its profit figure for the quarter.

"2021 will be another challenging year for us, but it's also the year that our future development strategy will begin to take shape," Eric Xu, the company’s rotating chairman, said.

"No matter what challenges come our way, we will continue to maintain our business resilience. Not just to survive, but do so sustainably. As always, we will remain focused on the needs of our customers and keep delivering practical business value."

The company also earned a patent royalty income of $600 million during the first quarter.

Huawei, which was among the top three smartphone manufacturers in the first half of last year, is now the world's sixth-biggest phone maker with an 8 per cent market share, according to Counterpoint Research.

In November, it sold its Honor smartphone business to a Chinese government-backed consortium for an undisclosed amount. This contributed to the drop in its consumer business segment's revenue, the company said.

Last month, Huawei reported a 3.8 per cent rise in 2020 revenues to $136.7bn. Net profit increased 3.2 per cent to $9.9bn.

The company, which employs more than 197,000 people, has been engaged in a trade dispute with the US administration, which considers the company to be a national security threat. However, Huawei has repeatedly refuted claims that its products could be a threat.