China’s Huawei Technology profit soars to $7.6 billion

Chinese smartphone maker works to allay U.S. security concerns.

Huawei Technology Ltd., the Chinese maker of smartphones and telecom equipment, said Friday its profit rose 28.1 percent in 2017, boosted by strong enterprise and consumer sales.

Huawei said it earned $7.6 billion for the year, a marked improvement over the previous year, when profit rose just 0.4 percent due to higher spending on research and marketing.

Total revenue rose 15.7 percent over 2016 to $96.2 billion.

The company headquartered in the southern Chinese city of Shenzhen is the No. 3 global seller of smartphones behind Samsung Electronics Ltd. and Apple Inc. It competes with Sweden’s LM Ericsson for the status of biggest maker of network equipment used by phone and internet companies.

Huawei, founded in 1987, is owned by its employees, with no publicly traded shares, but reports financial results in an effort to allay security concerns in the United States, Europe and Australia.

The company had planned to announce its first distribution agreement with a U.S. carrier in January but that was canceled without explanation. News reports said the carrier was AT&T Inc. and the company backed out due to pressure from U.S. authorities.

Huawei and Honor smartphone brands shipped 153 million handsets last year for total sales of $37.8 billion, a 39.1 percent increase, the company said. Sales of cloud, data center and other enterprise products and services rose 35.1 percent to $8.7 billion.

Research and development spending increased 17.5 percent over 2016 to $14.3 billion.

Huawei reports the highest R&D spending of any Chinese company.