Huawei Suffers Rare Drop in Revenue as U.S. Sanctions Bite

HONG KONG—Huawei Technologies Co. suffered a rare decline in revenue during the fourth quarter last year, as U.S. sanctions hammered its business and sales outside of China fell particularly hard.

The Chinese telecom giant said sales of its once hugely popular smartphones were suffering the most of all its business segments, with the company showing signs of difficulty sourcing the advanced chips needed to run its handsets due to U.S. export restrictions imposed last year.

Revenue in the fourth quarter fell 11.2% to 220.1 billion yuan, equivalent to about $33.6 billion, from a year earlier, according to calculations based on previously released figures by Huawei. For the full year, the company said revenue still grew 3.8% to a record 891.4 billion yuan, thanks to stronger performance earlier in the year. It still marked one of Huawei’s slowest years for revenue growth on record, the closely held company said.

“The supply restrictions for our smartphone business has caused us a great impact, and we haven’t been able to see a clear picture in the supply for our smartphones,” said Ken Hu, one of Huawei’s three deputy chairmen, during a press conference Wednesday at the company’s headquarters in Shenzhen. “We think this is a very unfair situation to Huawei and it has caused a lot of damage to us.”

The company’s results indicate that a yearslong U.S.-led campaign to strangle Huawei’s business is showing signs of success. The company said revenue declined in every major region outside of China last year. Sales growth in its core business of telecom infrastructure effectively stalled. Smartphone sales plunged, though the drop was offset by rising sales of laptops, smart watches and other consumer electronics.

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