Huawei Technologies reported 38 percent drop in revenue in the third quarter of 2021 compared to the same period a year earlier due to challenges in its smartphone business in the wake of U.S. sanctions.
Huawei, the world’s #1 telecom network maker, has posted revenue of 455.8 billion yuan ($71.32 billion) for the first three quarters, down by almost a third on the same period a year earlier, with a profit margin of 10.2 percent.

China-based Huawei generates revenue from telecom network business, smartphones and enterprise business. While Huawei did not break down its third quarter figures by business segment, the company said that the decline is mainly attributable to its consumer business.

Revenue of Huawei for the third quarter alone came to 135.4 billion yuan, based on Reuters calculations.

Performance was in line with forecast, said Huawei rotating Chairman Guo Ping.

Former U.S. President Donald Trump put Huawei on an export blacklist in 2019 and barred it from accessing critical U.S.-origin technology, impeding its ability to design its own chips and source components from outside vendors.

The restrictions have badly hurt Huawei’s handset business, with rotating Chairman Eric Xu saying in September that revenue from smartphones would dip by around $30 billion to $40 billion this year.

Huawei has occupied 8 percent of China’s smartphone market share in the third quarter, down from 30 percent a year earlier when it was the market leader, according to Counterpoint Research.

On the other hand, Honor, formerly a sub-brand which Huawei sold to keep it alive last November, sold 96 percent more phones in the same quarter compared to a year earlier, grabbing a 15 percent share of the China market, Counterpoint said.

Huawei is looking to develop new growth revenue streams outside of base station infrastructure and handsets, with a cloud business, and smart ports, mining and smart electric vehicles businesses.

In June it launched its Harmony operating system on smartphones, and is looking to supply software to autos companies.

The company, however, has received a boost from the return of its chief financial officer and daughter of its founder Ren Zhengfei. Meng Wanzhou returned to work at its headquarters on Monday after almost three years fighting extradition to the U.S. in Canada, with Chinese officials signalling the case against her had been dropped to help to end a diplomatic stalemate.