China’s Huawei is slowing its long decline under US sanctions as earnings improve

By David Kirton

SHENZHEN, China (Reuters) – China’s Huawei Technologies reported moderate revenue growth for the second quarter on Thursday, citing steady growth in its ICT infrastructure business as it found a foothold after US sanctions which collapsed its once powerful handset business.

Huawei posted revenue of 445.8 billion yuan ($62.03 billion) for the first three quarters, 10 billion yuan less than it saw in the same period last year, the company said Thursday.

Revenues fell 42.45% in the same period to 26.75 billion yuan, based on Reuters calculations, a company spokesman attributed the decline to investment in research and development and new business areas.

Revenue for the third quarter alone reached 144.2 billion yuan, up 6.5% from a year earlier, based on Reuters calculations.

The performance was in line with the company’s forecast, said rotating Chairman Eric Xu.

“The decline in our device business continues to slow, and our ICT infrastructure business maintains solid growth.”

The United States put Huawei on an export blacklist in 2019, barring the telecom giant from buying parts and technology from US companies without US government approval.

The move has further disrupted Huawei’s handset business, which led with 42% of the Chinese market in 2019. The company is now a minor player behind rivals, including its former budget unit Honor, which it sold in 2020.

Huawei is pushing to develop other businesses less dependent on US technology, including smart car parts, energy efficiency systems and cloud services.

In its first nine months, the Aito M5 vehicle, which Huawei jointly developed with Seres, ranked 10th among all electric SUV models by sales in China, according to the China Passenger Car Association.

($1 = 7.1870 Chinese yuan)

(Additional reporting by Zhang Yang; Editing by Jacqueline Wong)

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