Xiaomi reports fourth-quarter revenue beat despite drop in smartphone shipments

By Scott Kanowsky 

Investing.com -- Chinese consumer electronics giant Xiaomi Corp (HK:1810) posted better-than-expected revenue in the fourth quarter despite a sharp drop in key smartphone shipments caused by a spike in COVID-19 cases in mainland China following the sudden removal of strict national health rules.

Total revenue for the three months until December 31 came in at RMB 66.05 billion (RMB 1 = $0.1454), above Bloomberg consensus estimates of RMB 65.36B.

Smartphones - the largest driver of top-line growth at the Beijing-based company - saw shipments decrease by 25.9% to 32.7 million during the quarter, which Xiaomi said was due primarily to weakened demand during the COVID resurgence. The domestic smartphone market in the world's second-biggest economy was hit hard late last year when cases rose sharply after China's government reversed its long-standing zero-COVID policy.

Revenue from its smartphone segment slumped by more than a fourth to RMB 36.7B, missing analysts' expectations, as average selling prices for the devices also slipped.

But Xiaomi's higher-margin internet services division posted higher-than-projected sales of RMB 7.2B, thanks in part to "robust" overseas growth and strong performance at its gaming business that helped mitigate a decline in advertising and fintech revenues.

Meanwhile, the downturn in demand led to a decrease of just under 23% in cost of sales.

As a result, adjusted net profit of RMB 1.5B, while well lower than the same period in 2021, still topped estimates of RMB 1.28B.