Huawei expects jump in 2012 revenue, and may have overtaken Ericsson

Ericsson may have slipped behind rival Huawei in total sales last year, according to analyst estimates, though it is not clear if Huawei has actually overtaken Ericsson as the world's largest infrastructure vendor by revenue.

While Ericsson has yet to reveal its full-year figures for 2012 (scheduled for Jan. 31), data already published by Huawei could see it bypassing the Swedish manufacturer on the basis of total group sales, according to Investment Europe.

In a memo posted on Huawei's website, acting CEO Guo Ping told employees that revenue is expected to exceed $35 billion (€26.8 billion) for 2012 and net profit will hit $2.4 billion (€1.8 billion), both up more than 10 per cent year-over-year. However, this would indicate that Huawei may have missed some targets after the company said in September that it expected total revenues to hit €29.6 billion in 2012.

A direct comparison between Ericsson's revenue and Huawei's is not entirely fair, however, since Huawei has a large and growing mobile devices business while Ericsson no longer recognises any significant revenue from mobile device sales. Huawei was the sixth-largest handset maker in the world in the third quarter of 2012, according to ABI Research.

If Ericsson has slipped from its acclaimed leadership position, the implications for investors in Swedish equity could be significant, claims Investment Europe. The company's €24 billion market capitalisation makes Ericsson a mainstay of Stockholm's OMXS30 index. However, Ericsson's 'B' shares are down nearly 6 per cent over the past year, according to data from Nasdaq OMX, which produces the OMXS30.

Meanwhile, Huawei's forecast for a surprise turnaround in profit growth for 2012 is a reversal from the 53 percent decline in profit Huawei recorded in 2011.

According to the FT, industry sources claim that Huawei is expanding its sales of handsets, but has yet to succeed in the enterprise business--a market it is seeking to get more traction in to make up for a slower infrastructure business.

For more:
- see this Investment Europe article
- see this FT article (sub. req.)

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