Chinese tech giant Huawei has reported a 16.5% dip in its revenue for the first quarter of 2021, in comparison with its performance the previous year. The company has been heavily affected by the US sanctions that made it redirect its overall business strategy and saw the sale of its highly productive smartphone arm Honor in November 2020.

The company reported a revenue of about $23.46 billion for Q1 of 2021, which was less than the corresponding tally for Q1 of 2020, although net profit grew by 3.8% to 11.1% in comparison with 2020. The increase in net profits was due to cost-cutting strategies and a huge $600 million in royalty payments within the quarter.

Huawei says that the outlook remains bright as its refined business strategy to cope with the US sanction regime begins to yield positive outcomes. The company has had to diversify to some other areas and seek alternative strategies in coping with the US blacklist that impacted its developmental strides especially in 5G technology, where it remains a leader even with the drawbacks occasioned by the US blacklist.

Huawei’s smartphone business took a massive hit in the aftermath of the US chip blacklist, and this led to the sale of its smartphone arm, Honor in November. Huawei was also restricted from accessing supplies from its US suppliers which virtually stalled its rollout of market-leading next-generation technologies.

The business outlook also showed a marginal decline in revenues from Europe, the Middle East, and Africa (down 12.2%), the rest of Asia (down 8.7%), and the Americas, which declined by about 25%, showing that Huawei remains hurt more extensively in the Americas.

Last month, Huawei had posted a 3.2% increase in its profits for 2020 due mainly to its strong performance in its home turf of China. The company remains positive that it has turned the corner in rising above what it feels was an unfair attack by the US government.

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