Huawei Technologies Co.’s growth slowed significantly in the first quarter after Covid-19 slowed demand for smartphones and networking gear around the globe.
The Chinese company reported an 1.4% gain in revenue to 182.2 billion yuan ($25.7 billion) in the period, down from 19% over all of 2019. Its net profit margin shrank to 7.3% from 8% a year earlier, the company announced.
The coronavirus has hammered demand for the smartphones Huawei relies on to compete with Apple and drive growth, especially now the global rollout of 5G networks has decelerated. In addition, Huawei is hit by the Trump administration;s decision to blacklist China’s largest technology company -- cutting off access to crucial American components.
“While our growth rate has slowed, this is a resilient performance in the face of both the Entity List and the coronavirus,” Huawei Vice President Victor Zhang told reporters on a call.
Huawei, also the third-largest smartphone maker in the world, did not disclose its net profit. “The growth rate has slowed, but this is also a resilient performance in the face of both the entity list and the coronavirus we are facing at this moment,” Vice President Victor Zhang said in a statement on Tuesday.
In addition, the company did not report handset shipments for the quarter.
Since the outbreak, Huawei says that its partners have launched many 5G- and AI-powered medical applications. "We are using our expertise in communications technologies to help fight the pandemic and save more lives. The AI-assisted coronavirus diagnosis solution cuts CT scan review times from 12 minutes down to 2, helping doctors improve their diagnostic efficiency. 5G-enabled remote video consultation helps mitigate shortages of frontline experts and increases the efficiency of diagnosis and treatment of critical patients. AI-powered thermal imaging devices can take temperatures, increasing the efficiency of infection prevention and control in public places. In addition, Huawei has been doing its best to get masks, test kits, and other protective supplies to the countries and organizations that need them," Huawei said.