Huawei Misses 2019 Target Revenue, Citing the U.S. Sanctions Caused $12bn Loss

Huawei showed the 2019 revenue around 858.8 billion yuan ($123 billion), cited that its profit growth missed the targets as the U.S. sanctions.

Revenue for last year was recorded 19.1% YoY rise, while the net profit reported at 62.7 billion yuan ($9 billion), surged by 5.65% from last year, otherwise the growth was lower than 25% in 20118 and 28% in 2017.

Later in May, Huawei was placed on the U.S. Entity List, a blacklist that restricts American firms doing business with, including Google, a company that provided Android mobile operating system license to Huawei.

Eric Xu, rotating chairman at Huawei, told CNBC in an interview Tuesday that Huawei has missed the company targets even at the early of 2019, Huawei was expected the revenue of around 858.8 billion yuan ($123 billion), but in April, 2019, Huawei was preparing to adjust its target to $135 billion.

Therefore the Huawei rotating chairman accused U.S. sanction as reason for the $12 billion loss.

“We didn’t meet our revised targets, which was the $135 billion mark. We were short by $12 billion. This was the results of the U.S. sanctions,” Xu said, according to a CNBC translation of the speech in Mandarin.

“We had to deal with the challenges around the supply continuity and we had to address the supply challenges in the short term, so as to supply certain products to our customers. And we also had to increase our R&D (research and development) investment,” Xu added

After Google block, the company core business like smartphones and laptops, which accounted for more than 54% of Huawei’s 2019 total sales, collected the revenue of 467.3 billion yuan ($66.93 billion), lower than its target.

Mr.Xu also talked about the impact from coronavirus outbreak on Huawei’s business, he said that production activities in China are fully restored, but it is too early to determine the consequence effect as the business and factories were closed for a long period.