Chinese telecoms equipment vendor Huawei achieved revenues of RMB 102.7bn (US$ 16bn) for the first half of this year, up 5% on an annual basis, but saw its operating profits fall 22% by the same comparison to RMB 8.8bn.
The privately-held company does not provide details for the performance of its three main business groups (Carrier Network, Enterprise and Consumer), but states that the global economic situation and telecom equipment market remains a “significant challenge”.
Huawei’s main competitors have been suffering for the same reasons of late: Alcatel-Lucent issued a profit warning just last week, as did Chinese vendor ZTE, while Nokia Siemens Networks is being forced to make significant cuts to its headcount.
Its not all doom and gloom however: Swedish market leader Ericsson posted a SEK 1.2bn (€140mn) net profit for the second quarter of this year, down 63% from one year earlier but still placing it comfortably in the black.
If Huawei is to overtake Ericsson then it will first have to dislodge the lingering antipathy harboured by some Western governments, including the US and most recently Australia, where the company was blocked from participating in a broadband equipment tender for cyber-security reasons.