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BEIJING. – Telecommunications-equipment maker Huawei Technologies Co. said its revenue rose 19 percent in the first half of this year while its operating margin increased from a year earlier, as the Chinese company sold more software and services in addition to supplying networking gear.Huawei’s revenue and earnings have climbed steadily in recent years, helped in part by stronger domestic demand for faster networks, but also driven by its growth overseas, particularly in Europe, the Middle East and Africa.

Huawei’s expansion continues even though its mainstay telecom-gear business has effectively been shut out of the US, where a congressional report in 2012 concluded that the Chinese company’s equipment could pose a threat to national security.

Huawei strongly denied the allegations made by the US and has since increased efforts to expand in other parts of the world.
Shenzhen-based Huawei, which competes with Sweden’s Ericsson in the global telecom-gear market, said on Monday its revenue for the first half rose to 135,8 billion yuan ($21,9 billion) from 113,8 billion yuan a year earlier. Its operating margin was 18,3 percent, above its 2013 operating margin of 12,2 percent.

Huawei, a closely held company, said its profit margin has increased from the first half of 2013, but didn’t provide the actual figure for the same period a year-earlier.

Stronger sales of software and services contributed to steady growth of the company’s business for telecom carriers in the first half, Huawei said in a written statement.

The company also said it “enjoyed accelerated growth” in the sales of communications products used by corporate clients to build their own private networks. While Huawei is a giant in the telecom-equipment sector, it is still a minor competitor in the market for corporate private networks, an area dominated by US suppliers such as Cisco Systems Inc. and Juniper Networks Inc.

The corporate private-network business accounted for only 6.4 percent of Huawei’s revenue last year, but the company is counting on the segment to become an engine for its growth over the next several years.

Huawei said revenue for all of its business segments – telecom-carrier networks, corporate private networks and consumer products – increased in the first half, but didn’t provide financial results for each segment.

Huawei’s results for the period beat Ericsson’s. The Swedish company said last week that its net sales for the first half fell 4,7 percent to $15 billion, while its operating margin stood at 6,5 percent. Unlike Ericsson, Huawei also sells consumer products such as smartphones. – Wall St Journal.