By Geoffrey Smith
Investing.com -- Huawei said its profit last year fell the most on record, as the squeeze of U.S. sanctions tightened and China's struggles with COVID-19 hobbled domestic sales.
Net income fell by more than two-thirds to CNY 35.6 billion ($1=CNY6.8756), cushioned only by a gain on the sale of its Honor smartphone brand. That was despite a 0.9% rise in revenue to CNY 642.3B, which represented stabilization after a 28% drop in 2021.
“A challenging external environment and non-market factors continued to take a toll on Huawei’s operations,” Chairman Eric Xu said in a statement.
A ban on sales of U.S.-designed semiconductors to the Chinese telecommunications giant, in particular, has hobbled what was once the world's largest smartphone business. Foreign sales have been badly affected by its inability to use the Google-owned Android operating system, restricting the company largely to the domestic Chinese market.
Revenue at its mobile network infrastructure also stabilized at CNY 284B but remains under pressure as an increasing number of U.S. allies join the U.S. in banning it from all or part of their 5G networks over security concerns.
The stagnation and decline in what have been its two most important businesses in recent years was partly compensated by growth in cloud hosting, which generated CNY45B in sales last year (the first year Huawei has broken out such data). It appears to have accounted for most of the growth in the enterprise division in which it is housed, where revenue grew 30% to CNY 133B.