Shares in Huami Corp. (NYSE: HMI) dropped more than 8% Tuesday after the company's reports of lower net income in the first quarter.
The cloud-based healthcare service provider announced that in the three months through March its revenue reached $153.7 million, up 36.1% year-over-year. Net income was $2.7 million, or 4 cents per American depositary share, compared with $10.62 million in the same period in 2019.
As of March 31, 2020, the company had cash and cash equivalents of $357 million, compared with $254 million last year. With the big cash reserve, the company's management is confident in overcoming any unprecedented challenges created by the COVID-19 pandemic.
"We achieved solid unit sales of both self-branded products and Mi-Band 4, shipping 7.6 million units in the first quarter, a 35.7% rise from the same period last year," said Wang Huang, Chairman, and CEO of Huami. "Despite the impact of the COVID-19 pandemic that many other companies are also facing, we still kept our robust revenue growth and remained profitable in this challenging time period. This was driven by increasing brand awareness and adoption of our products by users both domestically and in the overseas market."
Based in Beijing, Huami designs and manufactures Xiaomi wearable products. That includes Xiaomi-branded smart bands, watches (excluding children watches and quartz watches), scales and associated accessories. According to Huami, it is the "most-preferred" partner of Xiaomi.
At this year's CES, the company launched the Amazfit T-Rex, a device with a military certified body ideal for outdoor activity.
Looking ahead, Huami will continue to make headway in international markets; the company expects to generate revenues in the range of 1 billion to 1.05 billion yuan, compared with 1.04 billion yuan for the second quarter of 2019.