“A seed that survives the storm will sprout and then blossom” – that is how Huawei describes how it will transcend the tech downturn caused by the coronavirus outbreak, which has seen its revenues for the first quarter of 2020 rise marginally year on year.
For the quarter ended 30 March 2020, Huawei posted overall revenues of CNY182.2bn ($25.7bn), inching up 1.4% compared with the first quarter of 2019. The company’s net profit margin in Q1 2020 was 7.3%. This compares with Q1 2019, when Huawei generated CNY179.7bn ($26.8bn) in revenue and a net profit margin of about 8%.
With its manufacturing hub right in the middle of the initial outbreak of Covid-19, it was inevitable that Huawei, like all tech companies in the area, would be adversely affected by the coronavirus. Indeed, on 18 February, Apple took the unprecedented step of warning that its then recently published quarterly results were no longer accurate because the outbreak of coronavirus in its Chinese production centres was sure to negatively affect worldwide iPhone supply and Chinese product demand.
Yet given this situation, Huawei tried to assure the investor community that its overall business results in Q1 2020 were in line with expectations and that the business was continuing as usual. Noting that Covid-19 continued to spread around the world, Huawei said it was taking “proactive measures” to ensure the safety of its employees, adding that it was working with its supplier network to address the tough challenges facing production and to resume operations.
Huawei vice-president Victor Zhang said: “These are difficult times for all of us. At Huawei, our priority remains playing our part in helping the world overcome coronavirus. Around the world, we’ve seen data usage spike as homes become offices, friends and families stay connected through video, and students take lessons online. The ability to keep in touch with one another has never been more important.
“And despite this shift, we’ve seen networks perform well. Huawei has worked around the clock with our customers – the telecoms operators – to ensure their networks remain reliable. While it has been critical for networks to be robust in the face of new pressures, the same can be said for those businesses that supply them, including Huawei.”
The company said networks were now a lifeline for people from all walks of life during the public health crisis, so ensuring normal network operations was of paramount importance. As well as “doing everything” in its capabilities to help carriers ensure stable and secure network operations, it said it was also working to meet the network demand created by social distancing.