Xiaomi's Quarterly Results Beat Estimates but Annual Sales Fall -- Update

Dow Jones03-19

By Jiahui Huang

Chinese smartphone and electronics maker Xiaomi posted stronger-than-expected quarterly results, but its annual revenue dropped due to lower smartphone sales.

The Beijing-based company reported a 51% jump in net profit to 4.73 billion yuan ($657.1 million) for the fourth quarter as revenue rose 11% to CNY73.24 billion, it said Tuesday.

The company's adjusted net profit, which includes share-based compensation, among other items, was CNY4.91 billion in the quarter, more than tripling from a year earlier.

Revenue from its smartphone segment rose 21% to CNY44.23 billion, which the company attributed to higher smartphone shipments that offset lower average selling prices in the fourth quarter. The Chinese smartphone maker shipped 40.7 million units globally in the period, taking a 13% market share, according to market-research firm Canalys.

For the full year, Xiaomi posted net profit of CNY17.48 billion, up sharply from CNY2.47 billion in 2022, when the pandemic hurt smartphone sales.

Its annual revenue fell 3.2% to CNY270.97 billion but was higher than a FactSet estimate of CNY270.65 billion. The company attributed the result to lower annual smartphone shipments and average selling prices.

Xiaomi's 2023 gross profit margin, however, reached a record high of 21.2%, rising 4.2 percentage points. Its smartphone gross profit margin in the fourth quarter increased to 16.4%, driven by improved product mix, lower inventory impairment provisions in the overseas market and lower costs of key components, the company said.

China's smartphone sales fell 7% in the first six weeks of 2024, according to Counterpoint. Xiaomi's sales dropped 7% in the period, while rival Apple's slumped 24%.

Xiaomi will announce the pricing of the SU7 sedan when it debuts next week, entering the Chinese EV market despite intensifying competition and a price war.

The company recorded CNY2.4 billion in expenses related to its smart EV business and other new initiatives for the fourth quarter.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

March 19, 2024 07:37 ET (11:37 GMT)

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Xiaomi's Quarterly Results Beat Estimates but Annual Sales Fall -- Update

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