Chinese smartphone maker Xiaomi Corp reported first-quarter earnings that fell below the expectations of analysts. The results come amid the challenges such as the coronavirus pandemic, chip shortages, and economic setbacks, the company and others are faced with. The company’s results were also affected by the ongoing Rusia-Ukraine war which has caused setbacks for many global companies. Video streaming platform, Netflix, for instance, lost 200,000 subscribers in the first quarter.
For the first quarter ended March 31st, the company reported revenue of 73.35 billion yuan, or $10.85 billion. This is a decline from what the company reported in the first quarter of 2021. The company reported a revenue of 76.88 billion yuan in the first quarter of 2021. Analysts had expected revenue for the quarter to come in at 74.3 billion, according to Refinitiv, but the company’s revenue figures were short of analysts’ expectations.
Explaining the challenges faced by the company, Xiaomi’s President Wang Xiang said that “In the first quarter the whole industry faced challenges, first with a shortage of components, then the resurgence of COVID-19, and also an impact in the macroeconomic environment. These challenges have dealt a heavy blow to our business.”
He also mentioned the covid outbreaks that occurred first in Hong Kong and later Shanghai disrupted its shipments adding that the months-long lockdown in Shanghai and the ongoing Russia-Ukraine war were most likely going to affect its results for the second quarter.
The company reported a decline in smartphone sales of 22.1 percent to 38.5 million units in the first quarter, according to a statement it issued. It also reported a quarterly loss of 530.7 million yuan, down from a profit of 7.79 billion the company reported a year ago.
Smartphone revenue, which is where the company derives most of its revenue declined to 45.8 billion yuan in the first quarter.
The company expects to face the same challenges that disrupted its first-quarter earnings in the current quarter.