In the second quarter of this year, the Chinese electronics giant experienced a net profit decline of approximately 21% compared to the same period last year. This downturn was driven by soaring costs for memory chips and other essential components, coupled with a decrease in smartphone shipments.
The company reported a net profit of 9.5 billion yuan (roughly $1.4 billion) for the three months ending June 30. Revenue also declined by 6.1%, reaching 108.9 billion yuan (about $16.2 billion), while adjusted profits sharply dropped by 43% to 6.2 billion yuan.
Revenue from the Phone × Artificial Intelligence of Things segment decreased by 11%, totaling 84 billion yuan (around $12.5 billion). Smartphone shipments fell sharply by 27% to 31.2 million units, but the average selling price increased by 26%, setting a new record of approximately 1,351 yuan ($200.90). Despite the higher prices, overall revenue from smartphones decreased by 7.5%, amounting to 42.1 billion yuan.
The decline in phone revenue mainly resulted from reduced shipment volumes, which was partially balanced by the higher average selling price. The shipment decrease was mainly attributed to fewer mid- and low-end models and sluggish global demand, influenced by ongoing price rises for key components.
Meanwhile, the company’s innovative sectors—including smart electric vehicles and artificial intelligence—saw a 17% increase in revenue, reaching 24.9 billion yuan (about $3.7 billion). Revenue from smart electric vehicles alone grew by 16%, totaling 23.9 billion yuan (roughly $3.6 billion), with deliveries jumping by 28% to 104,199 vehicles.
For the first half of the year, overall profit fell by 38% to 14.2 billion yuan (around $2.1 billion), with total revenue dropping 8.4% to 208.1 billion yuan (approximately $31 billion).
Shares of the company increased by 3.1% to HKD 28.30 (about $3.61) per share as of 11 a.m. in Hong Kong today. This follows a 1.2% rise on August 18 and a 4.8% increase yesterday.