China’s Huawei Technologies, the world’s third-largest smartphone maker, posted a 28 per cent rise in 2017 net profit on Friday, driven by cost controls and a solid performance in its home market.
The outlook for Huawei, which trails Samsung Electronics and Apple Inc in smartphones, is clouded by strong competition in the domestic market and declining sales in the United States, as Washington plans higher import tariffs on China’s tech products.
Shenzhen-based Huawei saw net profit for 2017 rising to 47.5 billion yuan ($7.3 billion), a big rebound from last year’s 0.4 per cent increase. The rise is largely attributable to a 85 per cent drop in net financing expenses as the company booked smaller foreign exchange losses, according to a Reuters report.
Revenue grew 15.7 per cent to 603.6 billion yuan, in line with the company’s previous guidance and its slowest growth in four years.
Huawei vowed to focus on improving profit after posting the slowest profit growth in five years in 2016 as its slim-margin smartphone business weighed down profit growth.
Huawei’s consumer business, which includes smartphone operations, grew at a slower 31.9 per cent to 237.2 billion yuan ($37.85 billion) after shipping 153 million smartphones last year. The year earlier the segment had grown 43.6 per cent.
Huawei this week launched its most expensive flagship smartphone to date in Europe - the triple-camera P20 series that sell for 649-899 euros - a fresh attempt to compete head-to-head with Samsung and Apple in the high-end phone market.
Market share gains in Europe have helped Huawei offset the company’s exclusion from the US, the world’s most profitable market for phone sellers.
Revenue from the Americas dropped 11 per cent to 39 billion yuan.