Xiaomi Corp. reported a 37 percent increase in quarterly profit as China’s top smartphone maker took advantage of Huawei Technologies Co.’s retreat to consolidate its lead in the market.
According to Bloomberg, adjusted net income was $491 million in the December quarter, beating the analysts’ average estimate of $442 million.
“Profit included one-time gains on the fair value of investments while revenue jumped 25 percent to 10 billion yuan, according to a filing to Hong Kong Stock Exchange. That compared with the 74.6 billion average of analyst estimates compiled by Bloomberg,” Bloomberg added.
”The chip shortage will become a big challenge this year and the next,” President Wang Xiang said on a call after the earnings were released. “We are working with partners to have a better supply situation.” He added that he’s “optimistic” that Xiaomi is on track for growth this year despite the component shortages.
Smartphone shipment growing
The Beijing-based firm grew smartphone shipments by 32 percent in the last three months of the year, leading the crop of Chinese phone makers grabbing market share from Huawei, whose shipments fell more than 40 percent under the weight of U.S. sanctions.
According to research firm International Data Corp, more than one in 10 smartphones shipped during the December holiday season came from Xiaomi, behind just Apple Inc. and Samsung Electronics Co.
But growth in the next few quarters may be capped by a shortage of vital components including semiconductors.
In addition, Xiaomi’s share of the China smartphone market climbed to 14.6 percent last quarter from 9.2 percent a year earlier, the company said in a statement. It retained its lead in India in the quarter and was ranked no. 1 in central and eastern Europe for the first time, Xiaomi said, citing data from Canalys.
Founded by billionaire entrepreneur Lei Jun more than a decade ago, Xiaomi has built a consumer electronics empire beyond smartphones. It relies on “ecosystem” companies to sell a wide spectrum of devices from robot vacuum cleaners to smart door locks to ease dependence on smartphone sales, which contributes roughly two-thirds of the company’s total revenue.
Chew Shou Zi, president of international operations, is resigning from Xiaomi for family reasons, the company said in a separate filing. Chew said in a tweet he will be joining social media giant ByteDance Ltd. as chief financial officer in Singapore.
The executive had served as chief financial officer when the firm went public in Hong Kong two years ago and was leading its expansion overseas, a key growth area. Revenue from overseas market rose 28 percent in the fourth quarter.