Huawei forecasts 10-12% sales growth in 2013

Huawei expects to generate revenues of RMB220.2 billion ($35.4 billion) for 2012, an increase of 8% on 2011, and forecasts sales growth of 10–12% this year.

Net profit at the company is forecast to rise 33% for 2012, to RMB15.4 billion.

The company remains on the defensive following a report by US authorities that argued both Huawei (Shenzhen, China) and smaller rival ZTE (Shenzhen, China) represent a security risk and should be avoided by US operators.

Huawei expects to generate revenues of RMB220.2 billion ($35.4 billion) for 2012, an increase of 8% on 2011, and forecasts sales growth of 10–12% this year.

Net profit at the company is forecast to rise 33% for 2012, to RMB15.4 billion.

The company remains on the defensive following a report by US authorities that argued both Huawei (Shenzhen, China) and smaller rival ZTE (Shenzhen, China) represent a security risk and should be avoided by US operators.

The report has drawn attention to the close links between Huawei and the Chinese government, with suspicions raised by the secrecy that surrounds the manufacturer and its finances.

Huawei has hit back at the allegations emanating from the US, describing the criticism as protectionist, but it is also making an effort to be more transparent.

“The earnings disclosure today is part of Huawei’s ongoing commitment as a private employee-owned company to be more open and transparent with stakeholders,” the company said in a statement accompanying the results announcement.

Huawei also said that “the personal income of each member of the management team, from board members to middle-level managers, is limited to their salary, incentive bonus and stock dividends provided by the company, with policies to ensure that no one in the company abuses their power for self-serving purposes”.

Despite its run-in with policymakers in the US, and similar problems in Australia – where it was prevented from bidding to work on the country’s national broadband network – Huawei appears to be faring much better than its longer-established Western rivals in the challenging economic conditions.

For the third quarter of 2012, Sweden’s Ericsson (Stockholm, Sweden) reported a 2% decline in revenues and a 42% drop in net income, while both Alcatel-Lucent (Paris, France) and Nokia Siemens Networks (Helsinki, Finland) have been slashing jobs as they struggle to remain competitive.

Ericsson remains the world’s largest equipment maker, but Huawei continues to close the gap.

Huawei said that 65% of its revenue now comes from outside China, with the EMEA region contributing RMB77.4 billion, the Asia-Pacific generating RMB37.4 billion and the Americas responsible for RMB31.8 billion of the total.

Huawei claims to serve 45 of the world’s top 50 operators and says that leading telecoms companies are responsible for about 70% of its revenues.

Last year it invested RMB29.9 billion in research and development, representing more than 13% of revenues.