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Huawei Sales Up, Net Down

4/23/2012 01:57:30 PM Eastern

Shenzen, China -
Net profits at Huawei, the maker of cellphones and wireless
infrastructure,  fell 53 percent to CNY
11.6 billion  ($1.84 billion) in 2011
despite an 11.7 percent revenue increase to CNY 203.9 billion ($32.4 billion).

 In cellular handsets and other mobile devices,
the company said mobile terminal sales rose 30 percent in 2011 to almost 150
million units. The terminals included 60 million mobile broadband devices and 55
million phones, including almost 20 million smartphones. Smartphone unit sales
were up 500 percent.

 The information was contained in the company's
annual report, just released and audited by accounting company KPMG.

 Huawei's non-domestic sales rose 14.9 percent
to CNY 138.4 billion ($22 billion) to account for 68 percent of total sales.
Domestic sales were up 5.5 percent to CNY 65.57 billion ($10.4 billion).

  Acting CEO Ken Hu cited multiple reasons for
declining profits. "The downward spiral in the global economy, combined with
other factors like political turmoil in some regions and exchange rate
fluctuations, has impacted our company this past year," he said. The global
economy, he continued, "remains stagnant, and "factors such as inflation and
exchange rate fluctuations have increased our operating costs and exposed us to
greater operational risks." Despite the challenges, "Huawei basically achieved
the expected business results" and also boosted R&D spending by 34 percent
to CNY 23.7 billion in 2011, he said. R&D spending represented 11.6 percent
of total annual sales.