Huawei Technologies Sees Net Profit Jump 20 Percent In 2008

Huawei Technologies, the up-and-coming telecom equipment maker from the Chinese city of Shenzhen, said in its annual report issued Wednesday that its 2008 net profit jumped 20 percent despite challenges in the global economy. The company made a profit of $956.9 million on revenues of $18.33 billion.

The WSJ reported that the company’s strong performance during a difficult year illustrates Huawei’s growing market share in recent years, by offering competitive technology for lower prices than competitors. By contrast, Ericsson (NSDQ: ERIC) posted a 47.3 percent drop in net profit for 2008 to 11.67 billion Swedish kronor ($1.36 billion), and Alcatel-Lucent said its net loss widened to 5.17 billion Euros.

The downturn did affect Huawei’s plans for growth in Europe this year. The WSJ reported that it now anticipates contract sales, which are a rough indicator of revenue in the ensuing year, to grow about 20 percent in Europe this year, instead of 30 percent. But overall, Huawei expects contract sales to grow 29 percent this year to $30 billion, from $23.3 billion in 2008. The weak global economy could help Huawei gain contracts in developed markets, as carriers become more price conscious. In March, Huawei won a contract a network infrastructure for Cox Communications and it’s rumored to be in the final running for Clearwire’s U.S. WiMax network build-out.

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