& cplSiteName &

Huawei's Operating Profit Soars

Robert Clark
News Analysis
Robert Clark
1/15/2014
50%
50%

Huawei boosted its operating profit by almost half in 2013, according to preliminary and unaudited full-year guidance numbers issued Wednesday. (See Huawei Unveils 2013 Preliminary Results.)

The Chinese vendor expects operating income of between 28.6-29.4 billion Yuan Renminbi (US$4.73-$4.86 billion), up by as much as 47% on its CNY19.96 billion operating profit in 2012.

Total revenue is expected to be CNY238-240 billion ($39.3-$39.6 billion), an increase of approximately 8% and, in dollar terms, likely to make it the largest telecom equipment vendor by sales for 2013.

The increase in annual revenues is similar to last year's topline growth, which was the lowest Huawei has ever reported, and suggests that the effects of China's 4G rollout are not yet being seen.

However, the operating margin of around 12% is Huawei's highest for three years.

By comparison, Ericsson reported an 8.1% operating margin in Q3, and a 9.7% margin for the 2012 financial year. (See Ericsson Suffers Sales Pressure.)

The company did not give any further details but said the higher operating profit was a result of improvements in internal management and operational efficiencies as well as higher customer spending.

"Cash flow from operating activities and the company's asset to liability ratio remained stable," it said in a statement.

Huawei said all three of its divisions -- carrier network, enterprise, and consumer (mobile devices) -- reported sales growth, but did not disclose numbers.

According to the company, more than three-quarters of its carrier network sales came from the world's top 50 operators, while the proportion of carrier network revenues from services and software increased to 37% from 34% in 2012.

But the standout improvement appears to have come from its handset division. The Huawei consumer business group improved topline sales 18% last year to top CNY54 billion ($9 billion), according to figures published by Chinese telecom news site C114. The company shipped 5 million smartphones in 2013, making it the world's third-biggest supplier.

The company invested CNY33 billion ($5.4 billion) on R&D, or about 14% of sales.

Huawei will announce its audited full-year results during the second quarter.

Table 1: Huawei Growth 2010-2013

Year Revenues (billions of Yuan) YoY change Operating profit (billions of Yuan) YoY change Operating margin
2013 (est) 238-240 8.1%-8.3% 28.6-29.4 43%-47% 11.9%-12.3%
2012 220.2 8.0% 19.96 7.3% 9.1%
2011 203.9 11.7% 18.6 -39.4% 9.1%
2010 182.6 24.6% 30.7 38.3% 16.8%
Source: Huawei

— Robert Clark, contributing editor, special to Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
R Clark
50%
50%
R Clark,
User Rank: Blogger
1/15/2014 | 10:50:14 AM
Re: China 4G to come....
Ericsson and Huawei were close last year on gross sales but only 70% of Huawei revenue came from carrier networks, so on that score it's still well behind.

The handset business could become the tail that wags the dog. It's now about 22% of revenue and has a shot of building a global brand.
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
1/15/2014 | 7:54:01 AM
China 4G to come....
IMagine what the numbers will be like for 2014, with the addition of the 4G rollouts in China!

No doubt that Huawei will be the biggest telecom vendor by sales this year, but with greater size come operational issues (normally). And its smartphone sales are growing but is that sustainable? I know that some models are pretty ropey in terms of voice quality.

 

And... Just imagine if Huawei also had a clear run at the US market....
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Huawei's Pre-MWC Analyst Briefing 2017 Highlights

2|22|17   |     |   (0) comments


Huawei shares its vision for this year's MWC.
LRTV Interviews
MWC17: 5G, Cloud RAN & More

2|21|17   |   04:35   |   (0) comments


Ovum Senior Analyst Julian Bright talks to Scott Bicheno from Telecoms.com about all things MWC, including Cloud RAN, Huawei's pitch to the industry and the road to 5G.
LRTV Interviews
MWC 2017's Key 2-Letter Terms

2|20|17   |   08:29   |   (1) comment


5G, AI, VR... these are just some of the two-letter terms that will dominate show-floor chat at MWC 2017 in Barcelona, according to these two blow-hards (a.k.a. Scott Bicheno of Telecoms.com and Light Reading's Ray Le Maistre). And then there's PB...
LRTV Interviews
Key Trends for Mobile Operators in Developing Markets

2|20|17   |   06:37   |   (0) comments


Ovum's Matthew Reed talks to Scott Bicheno from Telecoms.com about the challenges and opportunities facing mobile operators in the developing markets of Africa and the Middle East.
LRTV Documentaries
YouTube Takes on Facebook Live-Streaming

2|17|17   |     |   (0) comments


Popular 'YouTubers' will be the first to get the new service on their smartphones. You have been warned.
LRTV Custom TV
Open Source NFV/SDN Automation

2|17|17   |   05:54   |   (0) comments


AT&T ECOMP (Enhanced Control, Orchestration, Management and Policy) code is transitioning into the Linux Foundation for placement into open source. In this video, Carol Wilson provides an update on the maturation of open source ECOMP and meets with industry leaders from AT&T, Bell Canada, Orange, Linux Foundation and Amdocs to discuss what this means for the ...
LRTV Documentaries
Uber & NASA Collaborate on Flying Car Project

2|16|17   |     |   (0) comments


Is Uber for real? Well, it's hired NASA engineer Mark Moore to lead the project, and he wouldn't come cheap.
LRTV Documentaries
Zuckerberg Tries Out the Oculus Rift VR Glove

2|15|17   |     |   (0) comments


Facebook CEO shows off a new way to interact with the Oculus Rift virtual reality headset: an Oculus glove.
LRTV Custom TV
Huawei Digital Transformation Forum 2017

2|10|17   |     |   (0) comments


Here's a preview of the upcoming Huawei Digital Transformation Forum taking place in Barcelona with trending telecom topics like cloud, IoT, 5G and much more!
Telecom Innovators Video Showcase
Dan Sahar of Qwilt on Open Edge Cloud Platform

2|8|17   |   08:38   |   (0) comments


Dan Sahar, Qwilt's co-founder, sits down with Steve Saunders of Light Reading for a conversation about Qwilt's Open Edge Cloud platform and the new role of service providers in application and content delivery.
LRTV Documentaries
ZeroStack's 'Self-Driving Cloud'

2|7|17   |   01:09   |   (0) comments


Its Z-Brain tech automates day-to-day management and long-term planning for hybrid clouds.
Telecom Innovators Video Showcase
Nominum's Craig Sprosts on DNS & Cybersecurity Trends

2|7|17   |     |   (0) comments


Nominum's Craig Sprosts talks about the fast-changing landscape of cybersecurity with Steve Saunders of Light Reading. Sprosts touches on the trend of the rise of ransomwares, rivals of IoT base attacks, and mobile network security. He also discusses the realization of the importance of IoT security after a recent cyber attack that paralyzed several major ...
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Is the Time Right for a Cisco/Ericsson Wedding?
Ray Le Maistre, Editor-in-chief, 2/17/2017
Broadband Has a Problem on the Pole
Mari Silbey, Senior Editor, Cable/Video, 2/21/2017
Verizon to Start Fixed 5G Customer Trials in April
Dan Jones, Mobile Editor, 2/22/2017
Nice to See at Least One CSP Taking My Advice
Mitch Wagner, Editor, Enterprise Cloud, 2/17/2017
Charter Launches 5G Field Trials
Mari Silbey, Senior Editor, Cable/Video, 2/16/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
No One Likes This Click Here
Take a hint!
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.