Huawei braves Q1 results and delays in Europe 5G rollout

Huawei-braves-Q1-results-and-delays-in-5G-rollout

China-based technology giant Huawei finds itself at a crux after seeing a sharp drop in its revenue growth in the first three months of 2020.

According to a report, the firm has rounded up its revenue for the first quarter of 2020 and has found that it has totaled to over $40.6 billion (AUD). The company has made profits, but such has been deemed insignificant. 

Though Huawei forecasted a growth of 39% for the said quarter, financial reports have shown an increase of only 1.4% compared to last year’s revenues. Additionally, the company reported a net profit margin of 7.3%, which is lower than the profit margin in 2019 Q1. This situation alarmed the company’s executives and warned of “a possible delay” in its release of 5G networks in Europe.

Huawei’s barriers to success

The firm reflects that it had come from a difficult 2019 and is now being faced with new issues arising concurrently, such as the outbreak of the coronavirus and government-imposed restrictions in both the U.K. and the U.S. 

At the onset of the pandemic, the company suffered losses of forecasted sales as the novel coronavirus hammers the worldwide demand for smartphones. The lockdown has significantly hindered production in all of its warehouses, and with the inability to resume to its normal operations, CEO Eric Xu said at a press conference that the company is facing financial turmoil and sharply shrinking market demand.

It can be recalled that the company was placed on the U.S. Entity List last year as there have been talks as to how the company’s equipment could pose a threat to national security, bringing forth possible espionage. U.S. companies are restricted from doing business with Huawei as a result.

Both coronavirus and trade clampdown has resulted in the company cutting more than 600 jobs in the U.S.  

To remain resilient despite adversities

Now, Huawei has made a resolve to rely on its home market as its prime means of driving growth in its business. 

The firm affirms that it will continue to brave the waves by strengthening its employee share-ownership structure and further improving its business continuity plan. More of its efforts have also been redirected to research and development in order to maintain its position with respect to its competitors.

 

Featured image courtesy of BBC Click/YouTube Screenshot.

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