Huawei CEO downplays expected $30 billion revenue miss due to the Trump administration ban

  • Huawei CEO Ren Zhengfei plays down the impact of the U.S. ban on the company.
  • Huawei projected this week that revenues will be about $30 billion less than expected because of the ban.
  • Ren tells CNBC he is not concerned with the revised projections because the company will still book more than $100 billion in revenue this year.
  • Ren also says the company’s business is still strong in China.

Huawei CEO and founder Ren Zhengfei on Wednesday downplayed the impact of the U.S. ban on the company, just days after company said it expected $30 billion less revenue for the year.

In the interview with CNBC’s Deirdre Bosa, Ren said the slashed revenue forecast isn’t a concern since the company will still book more than $100 billion in revenue this year, which would be roughly flat versus 2018. He also said Huawei’s consumer business is still strong in China. The main problem is the overseas business, he said.

“I don’t see that problem, because in the Chinese market, the consumer business has not seen a decline,” Ren said. “It’s just that there might be declines overseas. In the worst case, 40%, but now it’s less than 20%. And that kind of decline is also changing. As I look at the declines in the consumer business, that would be about 10% roughly, so it’s not that big.”

But Ren did not give a clear explanation for how Huawei plans to make up for the decreased demand for its products following the U.S. ban, which the company says is expected to continue over the next two years.

“We are making adjustments internally so we project there might be a slowdown, but until yesterday’s report I didn’t see any slowdown,” Ren said. “And we don’t know what will be the growth by the end of the year. But we believe the $30 billion U.S. will be a very small thing.”

The Huawei ban affects the company’s ability to ship smartphones running Google‘s Android operating system. Google has said it will continue to provide security updates for current Huawei devices running Android, but the fate of future devices is still in limbo. Meanwhile, Huawei has said it has its own alternative operating system for smartphones in case it can no longer use Android.

The Trump administration invoked the ban, claiming Huawei poses a national security threat because of its ties to China’s ruling Communist Party.

Source: cbnc


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