VoIP Systems

Huawei Claims 2009 Revenues of $21.5B

With the world still waking up to 2010, Huawei Technologies Co. Ltd. is already talking about its financial growth during 2009 and its expectations for the coming year.

The company tells Light Reading that its "contract sales" (the value of signed contracts) were valued at more than $30 billion in 2009, and that its actual revenues for the year are set to be $21.5 billion.

A Huawei spokeswoman notes, though, that these figures are as yet unaudited, and that a more detailed appraisal of 2009 (including details of gross margins, operating income, and net income) will be made available in the company's annual report, set to be published in April, which will include its audited results.

The numbers released today are clearly preliminary but indicate that, unlike its rivals such as Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), and Nokia Networks , Huawei has thrived during 2009, despite the global economic downturn and a reduction in carrier spending. (See AlcaLu Reports Q3, Pressure Tells on Ericsson's Q3, and No Sign of Recovery for Nokia Siemens.)

The Chinese vendor has continued to land significant deals internationally, most recently making its mark with some notable Long Term Evolution (LTE) engagements, and has benefited from major network rollouts in its domestic market following the restructuring of the Chinese telecom landscape and the award of 3G licenses. (See Huawei Beats Ericsson to Swedish LTE Deal, Huawei, Telecom Italia Test LTE, Huawei Overtakes AlcaLu – Again! , Huawei Steps Up in North America, Huawei Swipes Optical Market Share, and 2009 Top Ten: Most Popular Huawei Stories.)

If Huawei has managed to bank $21.5 billion in actual revenues during 2009, it would represent an increase of $3.2 billion, or 17.5 percent, over 2008 revenues of $18.3 billion. (See Huawei Reports 2008 Revenues of $18.3B.)

That growth rate is all the more impressive given the relevant macro economic and industry conditions facing Huawei and its rivals during the past 12 months: The general consensus among the telecom sector's large vendors is that the value of the market for network infrastructure and associated software and services shrank by up to 10 percent during 2009.

But it also shows that the worldwide slowdown did have an impact on Huawei's growth, because the company had recorded much higher rates of annual revenue increases in previous years, as the table below shows.

Table 1: Huawei's Reported Revenues 2002-2009
2002 2003 2004 2005 2006 2007 2008 2009*
Reported revenues $2.1 billion $2.7 billion $3.8 billion $6 billion $8.5 billion $12.6 billion $18.3 billion $21.5 billion
Year-on-year growth -- 28.6% 40.7% 57.9% 41.7% 48.2% 45.2% 17.5%
* Unaudited
Source: Huawei

As for the contract sales number, it's hard to know how seriously that figure should be taken, as the $30 billion figure matches the projection the privately held Chinese vendor gave almost exactly a year ago, when no one knew what the following 12 months would bring. (See Huawei Predicts 29% Growth in 2009.)

But if the numbers are taken at face value, it means Huawei managed to increase the value of contracts signed by 28.8 percent during 2009. That stellar growth, though, is not set to be replicated this year, if the vendor's crystal balls are to be believed: Huawei expects its contract sales to reach $36 billion in 2010, an annual increase of 20 percent.

The table below shows how that projected growth falls short of previous years' increases in the value of contracts signed.

Table 2: Value of Huawei Annual Contract Sales 2002-2010
2002 2003 2004 2005 2006 2007 2008 2009* 2010**
Reported value of signed contracts (contract sales) $2.7 billion $3.8 billion $5.6 billion $8.2 billion $11 billion $16 billion $23.3 billion $30 billion $36 billion
Year-on-year growth -- 40.7% 47.4% 46.4% 34.1% 45.5% 45.6% 28.8% 20.0%
* Unaudited
** Projected
Source: Huawei

However flawed or accurate Huawei's initial numbers might be, they're likely to look somewhat different from those of its main rivals, which are expected to announce their 2009 revenues in the coming two months, with NSN likely to lead the way when parent Nokia Corp. (NYSE: NOK) announces its earnings (expected during the latter part of January).

— Ray Le Maistre, International Managing Editor, Light Reading

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