Huawei revenue grows 32% in 2016
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Huawei has reported a 32% increase in revenue for 2016, but profit grew just 0.4% as the company invested heavily in R&D.
Group annual revenue for the year was 521.6 billion yuan ($75.7 billion), while net profit reached 37.1 billion yuan.
Carrier business group revenues grew 24% to 290.6 billion yuan, as the operator focused on digital transformation as well as exploring opportunities in emerging categories including cloud and the IoT.
Enterprise revenues meanwhile grew 47% to $5.9 billion yuan. Consumer revenues likewise increased 44% to 179.8 billion yuan due to strong smartphone shipments of 139 million.
But the company’s 76.4 billion yuan in R&D spending muted profit growth for the year. Huawei rotating CEO Eric Xu said the spending marked an investment in future growth.
“As humanity continues to explore and make new breakthroughs in the digital world, digitization and increasing intelligence present huge business opportunities for all industries, and are also paving the road for new growth for the ICT industry,” he said.
“We will stay customer-centric and will support digital transformation in all industries, in order to create value for our customers and to grow sustainably.”
Questions & Answers
Q.Why did Huawei's profit grow so little despite the significant increase in revenue?
Why did Huawei's profit grow so little despite the significant increase in revenue?
Profit growth was muted because the company invested heavily in Research and Development during 2016. Their R&D spending amounted to 76.4 billion yuan, which Eric Xu described as an investment in future growth for Huawei.
Q.What contributed to the substantial growth in Huawei's consumer revenues?
What contributed to the substantial growth in Huawei's consumer revenues?
Consumer revenues increased significantly due to strong shipments of smartphones. The company shipped 139 million units, which helped drive a 44% growth in this particular business segment to 179.8 billion yuan.
Q.How much did Huawei spend on Research and Development in 2016?
How much did Huawei spend on Research and Development in 2016?
Huawei spent 76.4 billion yuan on Research and Development in 2016. This significant expenditure was identified as the reason for the relatively low profit growth despite the overall increase in company revenue.
Q.What is the total annual revenue Huawei reported for 2016?
What is the total annual revenue Huawei reported for 2016?
Huawei reported a total group annual revenue of 521.6 billion yuan for 2016. This figure translates to approximately $75.7 billion and represents a 32% increase compared to the previous year.