Huawei Earnings Hammered by Coronavirus

Thanks to declining demand during the Coronavirus outbreak, Huawei recorded its weakest quarter in years, with just 1.4 percent growth in revenues. Given the firm’s many headwinds—it’s also suffering from being blacklisted by the U.S. government—Huawei described its financial results as “resilient.”

Huawei reported revenues of $25.72 billion for the quarter ending March 31, a gain of only 1.4 percent over the same quarter a year ago. In that quarter, Huawei had reported 39 percent revenue growth year-over-year. The firm also revealed that its profit margin fell from 8 percent to 7.3 percent.

“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,” Huawei vice president Victor Zhang said in a statement.

Huawei, now the third-largest maker of smartphones, also declined to report the number of smartphone handsets it shipped in the quarter. But by most estimates, smartphone sales have fallen off a cliff and 5G deployments have slowed considerably, hurting Huawei’s two core mobile initiatives. The firm now relies largely on its home market in China, but Chinese smartphone sales have tanked as well. As a result, Huawei’s annual revenues are expected to fall by at least $10 billion.

Huawei has had other controversies, too.

Its plan to ship medical supplies to Europe to help during the pandemic has been met by complaints about so-called “mask diplomacy.” The charge is that the company is ingratiating itself with countries that have resisted its involvement in 5G infrastructure.

And the firm has once again been caught passing off DSLR photos as pictures taken with its smartphones. Though this is at least the fourth time in five years it’s been caught doing so, Huawei claims that it was the work of an outside photographer. “We apologize for this regrettable mistake and will improve our editorial process to prevent a similar incident from occurring in the future,” a Huawei statement explains.