Chinese smartphone giant Xiaomi Corporation swung to a net profit of $679.2 million (¥4.9 billion) for the third quarter of 2023, compared with a net loss of $205.6 million in the year-ago period.
- The result came higher than the estimate of $630.5 million from a poll of analysts by FactSet.
- The quarterly profit is driven by better profit margins in both smartphone and Internet-of-Things (IoT) and lifestyle product segments.
- Xiaomi’s gross profit margin rose to 22.7% in the third quarter from 21% in the previous quarter. Its smartphone gross profit margin was 16.6%, an increase of 7.7%,thanks to an improved product mix, lower inventory impairment provisions in overseas markets, and lower prices of key components.
- The gross profit margin of its IoT and lifestyle products jumped to 17.8%, up 4.3% from a year earlier.
- Adjusted net profit jumped by 183% from a year earlier to $835.2 billion.
- Revenue rose 0.6% to $9.9 billion, growing for the first time after six quarters. That beats an average estimate of $9.8 billion from 13 analysts polled by LSEG.
- Revenue from its smartphone segment was $5.8 billion in the third quarter of 2023.
- Global smartphone shipments rose 4% to 41.8 million units during the September quarter, it said.
“While we did not encounter many positive external factors, the achievements we were still able to make demonstrate an improvement in our overall capabilities,” Xiaomi President Lu Weibing said on an earnings call.
Xiaomi investors are awaiting signs of progress for its new electric vehicle (EV) division.
Xiaomi’s Lu reiterated Monday its goal of beginning EV production in the first half of 2024, signalling continued investment in the vehicle business.
In mid November, Xiaomi gave the first glimpse of its debut electric vehicle, a five-seat sedan, after Beijing approved the vehicle’s roadworthiness. The long-anticipated EV will be branded Beijing Xiaomi SU7 and manufactured by state-owned Beijing Automotive Group Co.