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Huawei Juggernaut Rolls On

Ray Le Maistre
7/24/2013

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. (See ZTE Suffers Sales Slip in First Half, NSN: The Recovery Looks Real and Ericsson Gets the Margin Jitters.)

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. (See Huawei Expects 10%+ Growth in 2013 and Ericsson Retains Its Crown – Barely.)

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.

— Ray Le Maistre, Editor-in-Chief, Light Reading

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JessicaKim
JessicaKim
8/11/2013 | 2:44:59 AM
re: Huawei Juggernaut Rolls On
Ask Huawei, The Biggest vs. the Best, what is the end goal for any public-traded company??
Ray Le Maistre
Ray Le Maistre
7/29/2013 | 6:05:35 AM
re: Huawei Juggernaut Rolls On
Huawei is gaining market share? Other companies -- including local rival ZTE -- are reporting a year-on-year dip in revenues.
Simon
Simon
7/26/2013 | 6:21:51 PM
re: Huawei Juggernaut Rolls On
The telecommunication market is flat under best circumstances: Yet Huawei reports ~10% increase in revenues while all other vendors report flat or slight improvement reports.
Does it really make sense? Could anyone shed a light on this paradox.
jbott557
jbott557
7/24/2013 | 1:39:30 PM
re: Huawei Juggernaut Rolls On
Looks like the full year results 2013 will show Huawei finally larger than Ericsson. Congrats.
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