Chinese smartphone company Huawei grows profit 33 percent

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By Larry Banks

China’s Huawei Technologies Co. said on Tuesday that its net profit rose 33% in 2014, propelled by strong revenue growth and foreign exchange gains.

Huawei rakes in $4.5 billion profits in 2014

Huawei is one of China’s most important smartphone manufacturers, in addition to one of the world’s key providers of telecommunications equipment for network operators. The company said today that its 2014 net profit rose 27.9 billion yuan ($4.5 billion) from 21 billion yuan the previous year.

Foreign exchange rates have also had a major impact on the Shenzhen-based company’s earnings, as it generates more than 60% of revenue from abroad.

Huawei Ascend P7

As Huawei grows its smartphone business, especially in emerging markets like Latin America, revenue from its consumer business group (which is mainly phones) rose %33 last year to 75.1 billion yuan, or 26% of the company’s total revenue. The networking equipment for mobile operators on the other hand accounted for 67% of Huawei’s revenue in 2014.

The company has also been increasing spending on research and development, including the next generation (5G) network technology, which is said to offer much higher capacity, faster mobile networks. It’s R&D now stands at 40.8 billion yuan, or 14% of its revenue – an increase of 29% from 31.6 billion yuan in 2013.

SOURCE: Reuters

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