Huawei Technologies Co. announced its operating results for the first quarter of 2022 on April 28. Its revenue and profit fell as the Chinese tech giant kept struggling under U.S. sanctions.

According to Wall Street Journal, Huawei achieved sales revenue of 131 billion yuan (19.8 billion dollars) in the first quarter of this year, down 13.9% year-on-year. For more than a year, its revenue has been declining as Western regulations have hampered sales of core items.

Its net profit experienced a similar pattern, down 67% to 5.6 billion yuan (857 million dollars). Its net profit margin dropped by 11.1% to 4.3% in the same quarter of 2021. The giant said this lower profit is due to lower revenue as well as greater investments in research and development (R&D) and business continuity.

Ken Hu, Huawei’s rotating chairman, said that the overall operating results were in line with expectations. While its consumer business was greatly affected, the telecom infrastructure enjoyed steady growth. In addition, the company has increased investment in R&D to maintain the ability of continuous innovation and new value creation for customers.

The tech giant has been under sanctions by U.S. export controls for over two years. The company’s access to a variety of essential chips and other components is limited. Its once-booming smartphone business has weakened. Although it is still the world’s top telecom equipment seller, its market share has dwindled.

A.P. News reported that the corporation had poured money into R&D since then. A total of 142.7 billion yuan (21.6 billion dollars) was used to create new technologies that carve out new business areas less sensitive to sanctions. It spends 22.4% of revenue on research and development, outperforming competitors like Samsung and U.S. tech giants like Apple.

At Huawei’s annual analyst meeting earlier this week, Hu reaffirmed the company’s commitment to creating new business sectors such as cloud computing and 5G.

In November 2020, the company also disposed of its lower-cost smartphone line, Honor. It intended to boost sales by shielding it from the sanctions on Huawei.

Although it is a privately held company, Huawei publishes a few unaudited financial numbers each quarter, including sales and profit margin. Each spring, it releases a complete annual report audited by the accounting firm KPMG.

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