Despite U.S. ban, Huawei reports year-over-year revenue growth of 23%

Despite the ban in the U.S. and other countries, Huawei's first half revenue is up 23% year over year, according to Huawei Chairman Liang Hua. (Huawei)

Despite the political headwinds of the U.S. ban, Huawei reported on Tuesday that its revenue increased 23.2% year over year to $58.3 billion.

In the press release, Huawei Chairman Liang Hua described his company's operations as "smooth," and said the "organization is sound as ever." Huawei's net profit for the first half of this year was 8.7%.

Sales revenue for Huawei's carrier business reached 146.5 billion yuan ($21.3 billion), with growth in production and shipment for wireless networks, optical transmission, data communications, IT, and "related product domains." On the 5G front, Huawei said it has shipped more than 150,000 base stations around the world while securing 50 commercial 5G contracts.

While Huawei, along with Nokia and Ericsson, is one of the leaders for 5G gear, countries such as the U.S., Australia and New Zealand have banned the use of its 5G equipment.

In May, the U.S. added Huawei to its Bureau of Industry and Security Entity List, which barred Huawei from doing business with American companies. While the Trump administration and others have maintained that Huawei installs "back doors" in its telecom gear to gather info for the Chinese government, Huawei has said that's not the case.

Since May, the Trump administration said that Huawei could potentially do business with U.S. companies, but it's not clear which ones.

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In June, Huawei CEO and founder Ren Zhengfei said his company had reduced its revenue forecast for the year. Ren said that Huawei's revenue would be down 30%, and that revenue would come in at an estimated $100 billion. In an earnings report at the start of the year, Huawei reported a net profit of close to $9 billion in 2018, which was an increase of 25% compared to the previous year.

In the face of the political obstacles Huawei is maintaining that it will still have a good year, according to Tuesday's press release.

"Revenue grew fast up through May," said Liang, in a statement. "Given the foundation we laid in the first half of the year, we continue to see growth even after we were added to the entity list. That's not to say we don't have difficulties ahead. We do, and they may affect the pace of our growth in the short term.

"But, we will stay the course. We are fully confident in what the future holds, and we will continue investing as planned – including a total of 120 billion yuan ($17.4 billion) in R&D this year. We'll get through these challenges, and we're confident that Huawei will enter a new stage of growth after the worst of this is behind us."

In Tuesday's press release, Huawei said its consumer business, which includes tablets, smartphones, PCs and wearlables reported 220.8 billion yuan ($32 billion) in revenue. Huawei shipped 118 million units of smartphones in the first of this year, which was a 24% increase year over year. Huawei is the worlds' second largest smartphone vendor behind Samsung and ahead of Apple. In Huawei's enterprise businesses, first half sales revenue was 31.6 billion yuan ($4.6 billion.)