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Huawei Technologies Co grew sales for a third straight quarter, after new businesses like cloud services and a resurgent smartphone unit helped mitigate the fallout from US sanctions.
Revenue rose 4.8% to 178.8 billion yuan ($24.7 billion) in the three months ended June, according to calculations by Bloomberg News based on the company’s first-half numbers. Net income almost tripled, at 26.8 billion yuan, after recording gains from earlier business sales.
The company credits improvements in operational efficiency, sales strategy and product mix for its return to growth. It recorded partial gains from the sale of certain businesses, Huawei said in a statement. The electronics behemoth sold mobile maker Honor
Device Co to a consortium in 2020 and parts of its server business in 2021, both of which are being paid out in installments.
“Our digital power and cloud businesses both experienced strong growth, and our new components for intelligent connected vehicles continue to gain competitiveness,” Chief Financial Officer and Rotating Chair Meng Wanzhou said in the statement.
Huawei’s marquee telecom equipment business was “solid” in the period, according to Meng, and delivered more than half of Huawei’s sales over the first six months of the year. The company grew first-half revenue for the first time in three years.
Huawei and Apple Inc were the only two major brands to record growth in China smartphone shipments in the second quarter, according to IDC data that showed the Shenzhen-based firm grew by 76%.
The company is trying to revive its high-end device business, which has been bludgeoned by US sanctions, but could feature 5G capabilities without using American chips.
It has been expanding its clientele to encompass China’s state-owned ports and coal mines, helping to digitise industries such as power generation. Its division providing cloud infrastructure and services has been gaining ground on Alibaba Group Holding Ltd and Tencent Holdings Ltd and making good progress overseas, according to Canalys. The boost from artificial intelligence demand is likely to sustain that momentum even while China’s broader economy struggles to revive growth.
Huawei has for years laboured under a series of US trade restrictions that cut the overseas supply of a slew of key components and software.