Xiaomi Swung to Profit in First Quarter on Investment Gains and Lower Costs

By Bingyan Wang

Chinese smart phone maker Xiaomi swung to a profit in the first quarter, as investment gains and lower costs tempered a drop in revenue.

Net profit came in at 4.20 billion yuan ($595.2 million), reversing from a loss of CNY587.6 million a year ago.

Revenue fell to CNY59.48 billion from CNY73.35 billion, as the global smart phone market remained weak, Xiaomi said. Revenue from the smart phone segment, its main source of income, decreased 23.6% to RMB35.0 billion.

Total expenses fell 6.4% on year, while gross profit margin hit a record 19.5%, helped by efficiency measures and other cost controls, it said.

Net profit was helped by CNY3.45 billion in fair-value gains on investments, reversing from a loss of CNY3.55 billion a year ago.

Xiaomi said it aims to fortify its smart phone premiumization strategy, and that it expects research and development expenses, which were up 18% on year at CNY4.1 billion in the first quarter, to exceed CNY20 billion this year.

Write to Bingyan Wang at bingyan.wang@wsj.com

(END) Dow Jones Newswires

May 24, 2023 06:36 ET (10:36 GMT)

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