Huawei margins slide continues on rising R&D outlay

Huawei’s profitability was hit again due in large part to a spike in R&D spending, with revenue flat year-on-year during Q1 as its core business stabilised in the face of uncertainty and ongoing US trade sanctions.

Revenue was CNY132.1 billion ($19.1 billion) and its net profit margin slid from 4.3 per cent to 2.3 per cent.

Huawei did not disclose net profit or break down revenue by business group.

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As in past quarterly earnings releases, Huawei suggested its business results were in line with forecast.

Rotating chair Sabrina Meng previously stated Huawei gradually pulled itself out of crisis mode in 2022, with business back to usual.

In late March, she said R&D investment in 2022 accounted for a quarter of total revenue and grew 13 per cent, noting both were among the highest in Huawei’s history.