Xiaomi, a Chinese company well-known for its economic mixes and its vision of monetizing internet services, surpassed analysts’ estimates of fourth-quarter results, though revenue was below expectations.
The Hong Kong-listed company has trebled more than its net profit to 1.85 billion yuan ($ 276 million), more than the average estimate of 1.7 billion yuan, according to Reuters Refinitiv. However, revenue for the quarter did not reach 47.4 billion yuan, up 26.5% to 44.4 billion yuan ($ 6.62 billion).
Xiaomi distinguished international markets in its latest earnings report, with the segment rising 118.1%, representing 40% of total revenue in the fourth quarter, compared to 28% in the same period last year. According to market analyst Canalys, Xiaomi has been mainly well excepted in India, where it holds a foremost position in the smartphone market and is going through swift growth in Western Europe.
Xiaomi has always presented itself as an Internet company, although smartphones continue to be the leading driver so far, accounting for 65.1% of total fourth quarter sales. Despite a bleak year for smartphone brands around the globe, last year, Xiaomi handsets grew nearly 30% to 118.7 Million units. In October, the company projected it would reach 100 Million in sales this month.
In the fourth quarter, 25.1% of Xiaomi’s revenue was for smart devices, excluding phones, and lifestyle items, 87% more than a year earlier. The latest category, ranging from umbrellas and backpacks to clothes and shoes, is at the heart of Xiaomi’s goal of luring more users, an effort the company has been working with selfie application maker Meitu.
Xiaomi’s net profit margin increased from 60.2% in 2017 to 64.4% in 2018, thanks to advertising activity with higher margins. Looking at the overall market picture, in smartphone segment, the company has also been one of the tough contestant almost in every major market.