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Huawei 2011 financials: 20 million smartphones sold yet profit down 53 percent

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Huawei’s annual earnings report is out and it’s a mixed bag, since while turnover increased by 11.7 percent to 203.9 RMB ($32.3 billion), profits plummeted 53 percent to 11.6 billion RMB ($1.8 billion). Revenue from overseas sales (138.4 billion RMB) equated for over half the company’s total income and it boasted of having sold 150 million consumer devices, including 20 million smartphones in the year. The company didn’t provide reasons for the drop in profit, emphasizing that it’s increased R&D spending by 34.2 percent to 23.7 billion RMB ($3.75 billion) and that in any event, it’s got around $30 billion of assets that can shoulder the brunt of a bad year.

However, the company may not see a rosy 2012 either, after both America and Australia refused to give the company big infrastructure deals (Huawei’s bread and butter) thanks to allegedly close relationships between the company and the Chinese government. It seems to be following a similar trajectory to rival ZTE, which also felt margins squeeze as it entered the global retail space and felt the heat when its political dealings were thrown in the spotlight.


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