Huawei Technologies Co’s quarterly revenue expanded at a slower pace after the Trump administration’s curbs took a toll on its consumer business during the Covid-19 pandemic.
Sales climbed by 3.7% to 217.3 billion yuan ($32.5 billion) from a year earlier, versus 23% for the second quarter, according to Bloomberg calculations based on January-September figures reported by Huawei.
Nine-month revenue was up 9.9% year-on-year and its net profit margin for the period was 8%, compared with 9.2% for the first half.
US prohibitions against shipments to Huawei took effect last month, cutting off the supply of vital semiconductors and other equipment needed to make its mobile phones and servers. The Chinese tech giant on Thursday unveiled the Mate 40 smartphone series, potentially its last major release powered by its self-designed Kirin chips.
Meanwhile, the company stockpiled critical radio chips to ensure it can supply China’s carriers in their rollout of 5G technology past 2021, people familiar have said.
“As the world grapples with Covid-19, Huawei’s global supply chain was put under intense pressure and its production and operations saw increasing difficulties,” the company said in a statement. “Throughout the first three quarters of 2020, Huawei’s business results basically met expectations.”
Citing national security concerns, the US has waged a far-ranging campaign against Huawei since 2018 that has landed its chief financial officer under house arrest in Canada and led to bans against the use of the company’s 5G equipment in countries like the UK and Japan.
The final blow came when the White House enacted sweeping restrictions against suppliers earlier this year, closing off any loopholes that had allowed Huawei to procure ready-made semiconductors that had kept its consumer business afloat.
Looking ahead, the company plans to focus on providing AI, cloud, 5G and computing to business clients and will “continue working closely with its global partners and using its innovative ICT technologies to create greater value for customers despite its complex situation.”
Huawei didn’t provide detailed breakdowns of the performance of its individual divisions for the latest quarter. During the first half, its consumer business accounted for more than half of total sales.