Xiaomi Profit Falls 43 Percent on Higher Costs
Xiaomi reported an adjusted net profit of 6.1 billion yuan for the first quarter, missing analyst estimates as memory costs rose. The company plans to expand its overseas presence and electric vehicle business to offset slowing smartphone demand and intense competition in the Chinese market.
Xiaomi Corp-Class B reported a 43% drop in first-quarter net profit to 6.1 billion yuan ($899 million) as rising component costs and domestic rivalry squeezed margins. The result missed the 6.4 billion yuan average estimate provided by LSEG data. Investors face a transition period as Xiaomi pivots toward global expansion to offset a 19% slump in smartphone shipments compared to a year earlier.
### Component Costs Squeeze Smartphone Margins The world’s third-largest smartphone maker saw its handset revenue fall 12.5% to 44.3 billion yuan year-on-year. Gross margins for the segment contracted to 10.1% from 12.4% a year earlier, driven by elevated memory prices and aggressive pricing in China.
