Huawei’s revenue stabilized in 2022 as the company diversified into new areas like cloud computing and automotive technology. But its profit plunged as pressure from U.S. sanctions and China’s pandemic controls weighed on the Chinese technology giant.
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Huawei reported on Friday its biggest annual decline in profit on record as U.S. sanctions continue to hit its business and strict pandemic controls in China weighed on the company.
The Chinese telecommunications giant said net profit for 2022 totaled 35.6 billion yuan ($5.18 billion), a 69% year-on-year decline. That’s the bigger than the 54% annual decline in 2011, according to CNBC calculations.
However, in 2021, the company got a big bump in profit after it sold off its Honor smartphone brand to a consortium of buyers, making the comparison with 2022 quite large. Huawei also named rising commodity prices, China’s strict pandemic controls last year and the rise in its research and development spend, as reasons for the profit plunge.
“In 2022, a challenging external environment and non-market factors continued to take a toll on Huawei’s operations,” Eric Xu, rotating chairman at Huawei, said in a press release.
Huawei said revenue rose 0.9% to 642.3 billion yuan in 2022, as the company stabilized its business following a more than 28% plunge in sales in 2021. The Shenzhen, China-headquartered firm has sought to diversify its business into new areas including cloud computing and automotive after a rough few years in which U.S. sanctions have hampered the company.
“In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers,” Xu said.
Through 2019 and 2020, the Chinese technology giant was cut off from key American technology, such as Google’s Android operating system and components it required such as semiconductors. That crippled Huawei’s smartphone business, which was once the number one in the world. Huawei’s…
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