"HONG KONG -- Huawei Technologies Co. recorded its second straight quarter of higher revenue in the third quarter, as signs emerged that its business has begun to stabilize following years of punishing U.S. sanctions.
Revenue at the Chinese telecom giant rose 6.5% to 144.2 billion yuan, or about $20 billion, in the third quarter compared with a year ago, according to calculations based on unaudited financial figures released by the privately held company Thursday.
Huawei said its main business line selling telecommunications equipment grew, while a longtime decline in its consumer-device business had slowed. It was the second straight quarter of higher revenue for the Shenzhen-based company, putting a halt to more than a year of dwindling revenue driven by plunging smartphone sales and restrictions on sales of its telecom equipment to many countries.
Huawei has been battered by U.S. export restrictions that include a 2020 ban on it buying advanced chips made with American technology. The restrictions have decimated the company's smartphone business, once the world's largest and a major source of growth. It has also dented its business of selling telecom equipment, though analysts say the effect has been less pronounced because such equipment requires fewer high-end chips and is more reliant on long-term business deals.
To offset the restrictions, Huawei has been developing an array of new business lines less dependent on chips. They include cloud-computing services, autonomous-driving components, smartphone software and consumer gadgets such as smartwatches and tablets, though the new businesses haven't offset the steep drop in smartphone sales.
The company has also been investing heavily in China's fast-growing chip-manufacturing industry via its investment arm Hubble Technology Investment Co. That industry faces new hurdles in the wake of sweeping export controls on high-end chips and chip-manufacturing equipment imposed by the Biden administration earlier this month.
The U.S. has long viewed Huawei as a national security threat and has said Beijing can use Huawei equipment to spy, which the company denies. A number of U.S.-aligned countries have lined up to bar Huawei from building their 5G telecom networks, curbing its international revenue, though it continues to win big contracts in China and is still the world's largest seller of telecom equipment overall, according to Dell'Oro Group." [1]
1. Huawei Posts Rare Increase in Revenue
Strumpf, Dan.
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 28 Oct 2022: B.4.
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