China's Huawei says sales down 16.5% amid US sanctions

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Residents wearing face masks pass by a Huawei electronics store in Beijing on Monday, April 12, 2021. Embattled Chinese tech giant Huawei said Wednesday first-quarter revenue fell after it sold its lower-priced Honor smartphone brand, but profitability improved. (AP Photo/Ng Han Guan)

BEIJING – Embattled Chinese tech giant Huawei said Wednesday first-quarter revenue fell after it sold its lower-priced Honor smartphone brand, but profitability improved.

Sales declined 16.5% from a year earlier to 152.2 billion yuan ($23.5 billion) due in part to lower revenue for its consumer unit, the company said. It gave no earnings but said its profit margin improved by 3.8 percentage points to 11.1%.

Huawei Technologies Ltd., China’s first global tech brand, is struggling to hold onto its global market share following U.S. sanctions that devastated its smartphone sales, once among the world’s highest. The company also is the biggest maker of network gear used by phone and internet carriers.

Washington says the company is a security risk and might facilitate Chinese spying, an accusation Huawei denies.

The sanctions bar access to U.S. processor chips and services including Google’s music and other popular apps. Huawei designs its own chips, but manufacturers are barred from using U.S. technology required to produce them.

Honor was sold in November in hopes of reviving sales by separating it from the sanctions on the parent company. Wednesday's announcement gave no details of sales by network gear, consumer and other business lines.

“2021 will be another challenging year for us, but it’s also the year that our future development strategy will begin to take shape,” Eric Xu, one of three executives who take turns as Huawei chairman, said in a statement.

Huawei has responded by emphasizing its sales in China and for electric and self-driving cars, industrial networks and other technology that is less vulnerable to U.S. pressure. Huawei has a stockpile of U.S. chips for high-end smartphones but executives have said those were being used up.