By Kosaku Narioka
Xiaomi is scheduled to report second-quarter results Tuesday. Here is what you need to know:
NET PROFIT FORECAST: Xiaomi’s net profit is expected to have more than doubled to 3.21 billion yuan ($440.3 million), according to a poll of analysts by S&P Global Market Intelligence. That would compare with net profit of CNY1.39 billion in the year-earlier period.
REVENUE FORECAST: Second-quarter revenue is estimated to have declined 6.6% to CNY65.55 billion, according to the S&P Global poll.
WHAT TO WATCH:
–SMARTPHONE: Gross profit from its smartphone business fell 13% to CNY3.93 billion in the first quarter, as smartphone shipments dropped 21% to 30.4 million. Investors will be focusing on any signs of improvement in the key segment.
–R&D: First-quarter research and development expenses increased 18% to CNY4.11 billion. Xiaomi expects those expenses to surpass CNY20 billion this year. Investors will pay attention to rising research and development expenses as the company continues to invest in the development of artificial intelligence and electric vehicles.
–MARGIN: Gross profit margin increased to 19.5% in the first quarter from 17.3% a year earlier, thanks partly to lower prices of key smartphone components such as memory and display panels. Investors will focus on margin trends, as manufacturers globally are dealing with high costs of parts and materials.
Write to Kosaku Narioka at [email protected]
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