|Huawei slashes revenue forecast amid continued US pressure|
Published 3 hours ago
Huawei CEO and founder Ren Zhengfei said the company’s revenue will be about $100 billion for 2019 and 2020.
Ren said that Huawei will reduce its production capacity which will equate to a $30 billion hit to revenue versus its forecasts.
He also said that over the next two years, Huawei will “do a lot of switch over of different product versions,” but did not specify if it meant finding replacements for American components.
“We are strong, I think there is no way we can be beaten to death,” he added.
“In the next two years, I think we will reduce our capacity, our revenue will be down by about $30 billion dollars compared to forecasts, so our sales revenue due this year and next will be about $100 billion,” Ren Zhengfei, founder of the telecoms equipment giant said, adding that the firm will regain its “growth momentum” after 2020.
Huawei Expects $30 Billion Revenue Hit From U.S. Clampdown
It is the first time the Chinese tech giant has quantified the potential impact of American actions against it
By Dan Strumpf
June 17, 2019 6:12 a.m. ET
The U.S. campaign against Huawei Technologies Co. is taking a toll, with the company’s founder forecasting a hit to revenue of about $30 billion over the next two years.
Ren Zhengfei said he expects revenue of about $100 billion for Huawei in 2019, a decline from last year’s roughly $107 billion, following lower-than-expected growth in the wake of a U.S. export blacklisting and other actions against the Chinese technology giant. Mr. Ren had earlier targeted 2019 revenue to come in around $125 billion. The privately held company selectively discloses its finances, though it publishes an audited annual report.
Huawei, the world’s largest maker of networking equipment and the No. 2 maker of smartphones, is reeling following a Commerce Department entity listing last month that restricts the ability of suppliers to sell it American technology. Huawei procured $11 billion worth of U.S. technology last year out of a total procurement budget of $70 billion, according to the company.
Mr. Ren’s comments provide the first window into how the blacklisting is weighing on the company’s financial outlook. Huawei has grown sharply over the years, as it made quick inroads into networking equipment and smartphones, with revenue growing 20% to more than $100 billion last year. In the first quarter it surpassed Apple Inc. to become the second-largest maker of smartphones, behind only Samsung Electronics Co.
The company was poised to capitalize heavily on investment in forthcoming 5G wireless technology, which is set to roll out in countries around the world in the next few years. But before the trade blacklisting, Washington had been pushing allies to avoid using its 5G gear because of fears it could be used by Beijing to spy or disrupt communications networks. Huawei has long denied that, and Mr. Ren has said he would refuse any order to spy on customers.
Mr. Ren made the remarks at a roundtable event titled “Coffee with Ren,” at the company’s Shenzhen headquarters, the latest in a public-relations push by the formerly reclusive founder. On the panel were also two Americans, the investor George Gilder and the former Massachusetts Institute of Technology professor Nicholas Negroponte.
Last week, The Wall Street Journal reported that the company is delaying the release of its $2,600 foldable Mate X smartphone to September from a previously expected launch of June, due in part to the need to improve the screen. Problems with the screen on Samsung’s Galaxy Fold smartphone led the company to postpone that device’s launch earlier this year. Huawei also shelved the launch of a laptop, its first device to be pulled since the ban.
Huawei’s U.S. customers are also taking a hit. Last week, U.S.-based chip giant Broadcom Inc. said its revenue will be $2 billion less than expected due to the restrictions on supplying Huawei.
Separately, Mr. Ren said the company doesn’t foresee any future business spinoffs or sales following the announcement earlier this month that it would sell its stake in its undersea-cable business, Huawei Marine Systems Co. He said the decision to sell the stake was made long ago and wasn’t related to recent U.S. actions.
“It’s not a decision we made recently,” he said.
Write to Dan Strumpf at firstname.lastname@example.org