Huawei says US blacklisting led to $12 billion revenue shortfall in 2019 as profit growth slowed

Huawei reported slowing profit growth in 2019 as the U.S. blacklisting the Chinese technology giant weighed on its business. Meanwhile, a top executive at the company told CNBC the impact from the coronavirus on its business is unclear. Revenue for last year totaled 858.8 billion yuan ($123 billion), a 19.1% year-on-year rise in yuan terms. Net profit came in at 62.7 billion yuan ($9 billion), marking a 5.65% rise from last year. That’s slower than the profit growth of 25% reported in 2018 and 28% in 2017.

Eric Xu, rotating chairman at Huawei, told CNBC in an interview Tuesday that the company had missed its own targets. At the start of 2019, Huawei projected revenue of around 858.8 billion yuan or $123 billion, which it eventually ended the year with. But in April of last year, it was preparing to revise that target to $135 billion. In May, however, the company was put on the U.S. Entity List, a blacklist that restricts American firms doing business with it. This included companies like Google which was no longer allowed to license its Android mobile operating system to the Chinese company.

Huawei faced a tough year in 2019 as the U.S. continued its campaign to try to get the company blocked from 5G rollout around the world. Next-generation mobile networks known as 5G promise super-fast data speeds and the ability to underpin future technologies like driverless cars. Washington has maintained that Huawei represents a national security risk arguing that its networking technology could be used by China for espionage. Huawei has repeatedly denied the allegations.

The Chinese technology giant still managed to become the world’s second-largest smartphone maker by market share in 2019, overtaking Apple, mainly by doubling down on its efforts in China. The coronavirus outbreak in China earlier in the year forced the country to essentially shut down. It led to businesses remaining closed for a long period of time and factories shut down.

Huawei says US blacklisting led to $12 billion revenue shortfall in 2019 as profit growth slowed, CNBC, Mar 31