Revenues barely grew despite the growth in phone and car sales

BEIJING – Chinese tech giant Huawei on Friday reported revenue numbers that showed just a 1% increase in the third quarter compared to last year, according to CNBC calculations.

This is despite the company launching a popular new smartphone in late August and increasing sales under its electric car project.

Huawei said revenue for the first three quarters of the year rose 2.4% year-on-year to 456.6 billion yuan ($62.33 billion) — the highest level for the period since 2020. US sanctions on the Chinese telecom company began in 2019.

Despite these limitations on Huawei’s access to cutting-edge technology, reviews have indicated that the company’s new Mate 60 Pro smartphone offers 5G-linked download speeds – thanks to its advanced semiconductor chip.

Huawei quietly launched the phone in China in late August, and declined to share more during its seasonal product launch event in late September.

More than 1.6 million Mate 60 series devices were sold during the first six weeks of sales, according to Counterpoint Research.

The research firm estimated that the majority of units sold, about 75%, were Pro models, or about 1.2 million units sold.

Apple, which launched its iPhone 15 in September, is expected to sell 10 million units of the new phone in China this year, bringing total iPhone sales to 45.5 million in the country, according to estimates from Shanghai-based CINNO Research.

Counterpoint Research said on Thursday that the American company saw smartphone sales decline by 10% in the third quarter compared to last year, while Huawei’s sales rose by 37%.

Huawei has also built a presence in China’s fast-growing new energy vehicle market, which includes hybrids and battery-electric vehicles.

The company sells its operating system and components, such as driver-assistance technology, to car manufacturers.

In December 2021, Huawei launched its own car brand Aito in cooperation with the manufacturer Seres.

Orders for Aito’s latest M7 phone had exceeded 60,000 as of October 16, just about a month after its launch, according to a social media post from Richard Yu, who heads Huawei’s automotive and consumer businesses.

Ito said on Wednesday that pre-orders for its upcoming M9 SUV had exceeded 15,000 orders.

Huawei is not publicly traded and did not generate revenue by business segment in its latest update.

The telecom giant said it recorded partial gains from the sale of certain businesses, but did not specify which ones.

Huawei said that its net profit margin during the first three quarters of the year amounted to 16%. This is higher than the 15% profit margin reported in the first half of the year, when revenue grew 3.1% to 310.9 billion yuan.

CNBC’s calculations of Huawei’s numbers showed third-quarter revenue at 145.7 billion yuan, up 1% from 144.2 billion yuan in the same period last year.

Huawei continued its efforts to expand its patent licensing business during the third quarter through Xiaomi and Ericsson deals, which covered 5G connectivity.

The telecom giant has rolled out 5G-based business applications in mining, ports and manufacturing, but it was not clear from Friday’s release how much revenue, if any, it generated for the company in the third quarter.

Huawei also moved forward in international markets by expanding its cloud business to Saudi Arabia in September. The company said this week that it had opened a research lab in Finland to test wearable devices for health and fitness.

The United States confirmed that the Chinese telecommunications giant poses a threat to national security due to its alleged links to the Chinese Communist Party and the Chinese army. Huawei has repeatedly denied the existence of any such risk.

— CNBC’s Arjun Kharpal contributed to this report.