Huami Sees Stock Drop Despite Beefy Profits Amid Tariff Uncertainty
China-based Huami saw its stock slide lower on Tuesday despite robust results in the third quarter.
The stock price in Huami Corp. (NYSE: HMI) slid despite the company's strong earnings, closing at $10.30 per American depositary share on Tuesday, at a 1.4% decrease.
The Shenzhen-based company, which makes smart wristbands, watches, scales and other accessories, reported today that its revenue in the three months through September reached $260.6 million, up 73% year-over-year. Net income was $28.4 million, or 44 cents per share, up 56% from a year ago.
The total units shipped reached 13.7 million, compared with 8.2 million in the third quarter of 2018, according to the report.
(Huami's revenue soared 73% year-over-year. Image: Huami)
"Our persistent execution of strategic initiatives focused on product diversification, brand elevation, and international expansion, continues to pay off, driving outstanding top-line and bottom-line growth in the third quarter," Wang Huang, the chief executive officer of Huami, said in the statement.
Huami, a partner of smartphone giant Xiaomi Corp. (HKEX: 1810), attributed its growth to the segment of Xiaomi wearable products and self-branded Amazfit products.
Founded in 2013, Huami has been focused on the global market, which may have put it under pressure on the Sino-U.S. trade war front.
U.S. President Donald Trump said in a speech at the Economic Club of New York on Tuesday that Chinese officials "are dying to make a deal."
He said the U.S. will decide whether or not to make a deal and threatened continuous tariff hikes.
"If we don't make a deal we're going to substantially raise those tariffs," Trump said.
Huami announced in October it has partnered with U.S. watchmaker Timex Group USA Inc. and the U.K. automotive technology company McLaren Automotive. The company has been backed by U.S. venture capital firms Sequoia Capital, Morningside Venture Capital and Banyan Capital.
"We view the overseas marketing campaign as an essential strategy for our growth with additional global product launches being planned for future dates," Huang said Tuesday in the statement.