Huawei tops $100 billion revenue for first time despite political headwinds

Huawei’s revenue grew 19.5 percent in 2018, surpassing $100 billion for the first time, despite continuing political headwinds from around the world.

Sales came in at 721.2 billion yuan ($107.13 billion) last year. Net profit reached 59.3 billion yuan, higher by 25.1 percent compared to a year ago. The revenue growth was faster than that seen in 2017, but the net profit rise was slightly slower.

Huawei’s numbers are a bright spot for the firm, which has faced intense political pressure. The U.S. government has raised concerns that Huawei’s network gear could be used by the Chinese government for espionage. Huawei has repeatedly denied those allegations.

Sales in its carrier business, which is its core networking equipment arm, reached 294 billion yuan, slightly below the 297.8 billion yuan recorded in 2017.

The real driver of growth was the consumer business, with revenue for that division rising 45.1 percent year-on-year to reach 348.9 billion yuan. For the first time, consumer business is now the biggest share of Huawei’s revenue.

5G controversies

President Donald Trump’s administration has tried to pressure allies to bar Huawei from taking part in the rollout of next-generation mobile networks known as 5G.

While some countries such as Germany have defied the U.S., others such as Australia and the United Kingdom have taken a cautious approach toward the company.

The latest headache for Huawei came on Thursday after the board tasked with vetting the Chinese firm’s equipment in the U.K. raised concerns about the gear. The government-led oversight board said it found “concerning issues in Huawei’s approach to software development bringing significantly increased risk to U.K. operators.”

It concluded that it will be difficult to appropriately risk-manage future products” from Huawei, but stopped short in calling for an outright ban.

“We understand these concerns and take them very seriously,” Huawei said in a statement on Thursday, adding that it will continue to work with the U.K. government in addressing the issues raised.

Huawei has tried to counter the negative news toward the company through a public relations push as well as a legal offensive.

Earlier this month, Huawei filed a lawsuit against the U.S. over a law that bans government agencies from buying the Chinese technology giant’s equipment, claiming the legislation is unconstitutional.

‘Double-digit growth’

Guo Ping, one of the rotating chairman at Huawei, said in a press release on Friday that “cyber security and user privacy protection are at the absolute top” of the company’s agenda.

Responding to a CNBC question on guidance for 2019, Guo said that revenue grew 30 percent year-on-year in January and February combined.

He also said he expects double-digit growth for this year, despite the various headwinds.

“With the 5G investments made by the carriers this year, and industry digitalization opportunities and growing consumer demand, Huawei will still enjoy double digit growth in this year,” Guo said in Mandarin, which was translated into English by an official translator.

“Moving forward, we will do everything we can to shake off outside distractions, improve management, and make progress towards our strategic goals,” Guo said in his press release.

 FROM CNBC
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