Xiaomi's Profit Rises on Record Revenue, Strong EV Margins — Update

By Jiahui Huang

Xiaomi's second-quarter net profit rose on record revenue and strong margins in its new electric-vehicle business.

The Chinese maker of smartphones and other consumer electronics said Wednesday that its quarterly net profit rose 39% from a year earlier to 5.10 billion yuan, equivalent to $714.6 million. That beat the 4.47 billion yuan estimated by analysts polled by FactSet.

After adjusting for share-based compensation and other items, its quarterly profit was 6.18 billion yuan, compared with 5.14 billion yuan a year earlier.

The Beijing-based company reported record revenue of 88.89 billion yuan, up 32% from a year earlier. That also topped analysts' estimates.

The stronger-than-expected earnings were supported by robust smartphone revenue growth and record revenues from the Internet-of-Things and internet-services segments.

Revenue from its smartphone business rose 27% to 46.52 billion yuan, while revenue from its IoT and lifestyle product segment, which includes tablets, television sets and laptops, rose 20% to 26.76 billion yuan.

Revenue from internet services rose 2.7% to 8.3 billion yuan, driven by higher advertising sales that offset lower gaming revenue.

Xiaomi generated 6.2 billion yuan in revenue from its EV business after launching its first electric car, the SU7, in late March.

The 15.4% gross profit margin of its smart EV and other new initiatives segment, which the company reported for the first time, propelled it to the ranks of Chinese EV makers with double-digit margins, including BYD and Li Auto. Rivals XPeng and Zeekr posted second-quarter gross profit margins of 14.0% and 17.2%, respectively.

Xiaomi's overall gross profit margin fell to 20.7% from 21.0% a year earlier and 22.3% the previous quarter, dragged by lower margins in the smartphone segment due to intensifying competition in China and higher costs of key components.

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

(END) Dow Jones Newswires

August 21, 2024 07:52 ET (11:52 GMT)

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