Huawei Logo 2016 AH

Huawei Revenues Rise 37%, Phone Business Grows 73% In 2015

April 1, 2016 - Written By Kishalaya Kundu

Huawei Technologies, China’s telecommunications equipment and consumer electronics giant, continues to grow faster than any of its peers, aided by strong growth in its smartphone business in its home country and beyond. The company on Friday released its financial report for the year 2015, which reveals that its revenues for last year stood at 395 billion yuan ($61.10 billion), which is not just a 37% rise over its 2014 revenues, but is also nominally higher than its earlier guidance of 390 billion Yuan ($60.31 billion). The rate of growth is said to be Huawei’s highest since 2008, and the company apparently continues to be bullish on its growth prospects for this year as well. At its earnings call this Friday, Huawei issued a guidance saying that it expects its 2016 revenues to be around the $75 billion mark, which would be a 23% increase over its last year’s figures.

Taking a closer look at the numbers and breaking them down by sectors, Huawei’s revenues from its consumer electronics business increased a whopping 73% last year, amidst reports of the company spectacularly outperforming its biggest competitors in the country – Lenovo, Xiaomi, Meizu and the like. Huawei reportedly managed to ship as many as 100 million smartphones last year, which represents a rise of 44% from its already-impressive 2014 numbers. The company reported net profits from its consumer business rising 32% to 36.9 billion yuan ($5.71 billion) last year, from 27.9 billion ($.31 billion) the previous year. For the current year, the company says it expects revenues from its consumer electronics business to rise to about $30 billion, which will be a growth of 51% on a YoY basis.

Coming to Huawei’s bread-and-butter telecom equipment business, the company reported a topline growth of 21.4% amidst strong demand for 4G equipment, what with most carriers in China and around the world still continuing to expand their 4G footprint. Huawei’s enterprise business that builds private networks for companies and organizations may only be its smallest unit, but it still showed robust growth with a 43.8% increase in revenues last year. Having produced a phenomenal set of numbers for its shareholders, the only thing that may come off as a little bit of a disappointment, is the company’s operating margins that came down slightly to 11.6% last year from 11.9% a year earlier. Either way, Huawei also reported that it continued to invest heavily in R&D, having spent about 15% of its gross revenues last year on that account.