Huawei Juggernaut Rolls On

Posted on Jul 29, 2013 in Industry News, News

Huawei Technologies Co. Ltd. has once again defied what is mainly a stagnant market for communications equipment by reporting a 10.8 percent year-on-year increase in first-half revenues to 113.8 billion Yuan Renminbi (US$18.55 billion).


Not only is that impressive growth, but it comes in the wake of mixed results from some of Huawei’s main rivals. Nokia Siemens Networks and ZTE Corp. have both just announced year-on-year dips in their second-quarter sales, while Ericsson AB announced flat revenues.


Huawei did not specify any particular sales drivers, noting only that the Carrier Network, Enterprise and Consumer (devices/smartphone) business lines all reported improving sales.


The vendor didn’t provide any margins either, but noted that it expects its full-year 2013 net profit margin to be between 7 and 8 percent: At its current run rate, that suggests Huawei is on course to announce full-year net income of around $3 billion.


It also expects to achieve its target of full-year revenue growth of 10 percent, which would put its 2013 revenues at around $40 billion, almost certainly enough to make it the world’s largest comms equipment vendor by sales, a position currently held by Ericsson.


Huawei could do with some positive news. The company has been dragged back into the security spotlight again during the past week following accusations by Michael Hayden, a former head of the CIA and of the U.S. National Security Agency, that Huawei has engaged in espionage activities. In addition, the U.K. government has just announced a review of operations at Huawei’s cyber-security evaluation center in Banbury, Oxfordshire, following a parliamentary report that raised espionage concerns.