Huawei expects 2021 revenue to drop 28.9% as sanctions drag on
A Huawei store in Hangzhou showcases the company’s new foldable smartphone, the P50 Pocket, on December 23, 2021.
Long Wei | China Visual Group | Getty Images
BEIJING – Chinese telecommunications giant Huawei said on Friday it expects revenue this year to rise to 634 billion yuan ($ 99 billion), down 28.9% from to a year ago.
The company has suffered from US sanctions, the semiconductor shortage and a global collapse in demand for smartphones.
The estimate for the year 2021 shows that Huawei’s revenue for the second half of the year increased from the first six months to 313.6 billion yuan, from 320.4 billion yuan.
The company reported sales of 891.4 billion yuan in 2020, up 3.8% from the previous year. That’s much slower than the 19.1 percent year-over-year increase reported for 2019, with revenue of 858.8 billion yuan.
Friday’s post is part of an internal New Years message from rotating Huawei chairman Guo Ping who focused on rallying employees to keep going.
The letter did not specify the reasons for the expected drop in income, but noted “serious challenges” stemming from “an unpredictable business environment, the politicization of technology and a growing de-globalization movement,” according to the letter. an English version seen by CNBC.
Guo added, “Over the past year, our carrier business has remained stable, our corporate business has experienced solid growth, and our device business has rapidly expanded into new areas of business.”
For the next year, Guo said the company’s goals included increased efforts to develop and attract talent, and develop automotive-related technologies.
Last week, Huawei announced that the first electric car with its HarmonyOS operating system would likely start shipping at the end of February.
Huawei typically releases its more detailed annual report in March.
Figures released for the first half of 2021 showed that the two largest business segments, consumers and operators, saw steep year-over-year declines. The much smaller business activity, which has become a central part of Huawei’s growth strategy, increased by 6.6 billion yuan.
In 2019, the administration of former President Donald Trump put Huawei on a blacklist that blocked U.S. companies from selling technology to the Chinese company, citing national security concerns. Huawei has denied that it poses such a threat.
While those restrictions have not eased, other tensions between Huawei and the U.S. government have been.
CFO Meng Wanzhou, daughter of founder Ren Zhengfei, returned to work at the company’s headquarters in Shenzhen this fall after reaching an agreement with the US government over charges of wire fraud.
Meng had fought extradition to the United States from Vancouver, where she was arrested in December 2018. She has spent most of the past three years under house arrest, during which her bail conditions of 10 million Canadian dollars (7.9 million dollars) allowed him to venture during the day with security tracking.