Huawei Posts Net Profit of $5.3B for 2016, Flat Profit Growth

Huawei has just posted their financials for the full 2016 year, and unsurprisingly, their profit growth was actually flat for the year. Making it the first time in five years that their profit growth has been flat. Profit increased just 0.3% in 2016, when compared to the year earlier. This isn't surprising since Huawei has opted to spend more in 2016, to help increase their market share, seeing as how they are seeing a huge amount of competition in their homeland of China, and around the world. Huawei did remain the third largest smartphone maker, though.

For the year, Huawei posted 521.6 billion Yuan, which is around $75.6 billion USD in revenue, which is a 32% increase year-over-year. Huawei did not mention what their goals were for the consumer business unit of the company, but did state that a net profit margin of around 7% for the group is a "reasonable target". Their net profit margin dropped to 7.1% from about 9.3% a year earlier. Out of that 2.2% decline, about 0.9% of that decline is due to the additional spending that the unit has been doing in 2016, to increase their market position. Huawei is seeing 2017 as a year of consolidation for the company. They are wanting to stabilize their financials before they move onto the next move. Which is likely a good move for them and their shareholders.

Huawei has become the third largest smartphone maker, without really pushing their products in the US, which is one of the top three mobile markets. Huawei has done well in their homeland of China, competing pretty steadily with Xiaomi for the top spot in that country. The two flip flop from #1 and #2 basically every few months. Huawei has also become fairly popular in Europe and other parts of Asia. They recently announced a slew of new products including the Huawei P10, P10 Lite, P10 Plus and the new Huawei Watch. Not to mention their e-commerce brand, Honor has an event coming up in April where they are expected to announce a new high-end smartphone, after the Honor 6X had done pretty well for them, when that launched in January of this year. Huawei is doing quite well on the mobile side of things, even with the hurdle known as the US.

 

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