Chinese telecommunications equipment maker Huawei saw its sales drop significantly in the first quarter of this year. In other words, high-intensity U.S. sanctions deal a direct blow.
Marketwatch reported (4/29), Huawei said in its earnings data released the previous day that its first-quarter sales stood at 150.57 billion yuan. It is down 16.5% from the same period last year. In particular, the decline in sales is even more shocking. As sales were the worst in the first quarter of last year due to the direct hit of Covid-19.
However, the quarterly net profit was 16.84 billion yuan, up 26.6 percent from the same period last year. Even though Huawei has to admit its sales drop.
Huawei has been growing backward for two consecutive quarters. Sales in the fourth quarter of last year fell 11.4% year-on-year. The biggest cause is U.S. sanctions.
Due to the U.S. government’s high-intensity sanctions, Huawei has been having difficulties in procuring semiconductors since September last year. Therefore causing serious disruptions in producing its main products such as telecommunication equipment and smartphones. In particular, the separation and sale of Honor, a mid- to low-priced smartphone brand, last year affected sales decline.
In a related development, Huawei explained, “The Internet sector has grown stably, but sales in the consumer sector have declined due to the sale of Honor in November 2020.”
The Biden administration is also working to explore new markets by expanding its electric vehicle and cloud sectors as the possibility of easing U.S. sanctions is decreasing. Earlier, Huawei Chairman Ren Zhengfei drew attention by mentioning the possibility of Huawei’s listing.
