Huawei 2012 Profits Expected To Grow By 29 Percent
Despite all the criticism, Huawei comes out on top
Chinese telecoms giant Huawei has announced it is expecting profits of $2.4 billion (£1.48bn) for 2012, a 29 percent rise from a year before, when it earned $1.86 billion (£1.86bn).
In 2010, the profits of the company were at the record level of $3.7 billion (£2.28bn).
Huawei attributes its success to new projects and expansion into the high-end smartphone business. The numbers show that recent public relation issues and the global recession didn’t have much impact on the end-of-year results.
Year of the dragon
According to the Economist, last year, Huawei became the largest ICT equipment maker in the world, after overtaking Scandinavian rival Ericsson in the summer. Founded in 1988, it still operates as a private company, owned by its 140,000 employees.
Huawei’s net profit for 2012 is expected to reach $2.4 billion, according to a New Year memo published by Reuters. The acting CEO Guo Ping also revealed that the revenue of the company for the past year could exceed $35 billion.
“We should devote our limited energy to specific business objectives, and avoid the impulse to expand business blindly,” wrote Guo. “Managers who expand business blindly must be held accountable.”
Last year, the Chinese company ran into some trust issues in the US, UK, Australia and Canada. The Intelligence Committee of the US House of Representatives even suggested that both Huawei and ZTE shouldn’t be allowed to sell their products in America.
“China has the means, opportunity and motive to use telecommunications companies for malicious purposes,” said the committee. It claimed classified and unclassified information had indicated neither Huawei nor ZTE could “be trusted to be free of foreign state influence”.
Later, the company was accused of damaging the European manufacturers of wireless networking equipment by dumping low-cost products in the EU, with the help of Chinese state subsidies.
Huawei has denied any links to the Chinese government, and claimed that the US report was based on “rumours and speculations to prove non-existent accusations”. Being vilified in the media didn’t stop the company from expanding rapidly abroad, and opening new facilities in Finland and Reading in the UK. Huawei also said it plans to double its European workforce over the next five years.
Meanwhile, Huawei’s neighbour and rival ZTE, the fifth largest telecoms equipment manufacturer in the world, reported the biggest quarterly loss since its IPO.
Huawei is expected to announce audited financial results in the next few months. Ericsson has yet to report its full-year figures.
What do you do when tech fails? Take our quiz!