By David Kirton

SHENZHEN China (Reuters – China’s Huawei Technologies Co Ltd revenue plummeted by 38% in its third quarter compared to the year before. The U.S. sanctions had hampered the company’s smartphone business, as well the potential for new areas of growth, and have impeded the expansion.

Chinese telecoms giant Huawei posted revenues of 455.8 Billion Yuan ($71.32Billion) for its first three quarters. This was almost a third lower than last year’s period and had a profit margin 10.2%.

Based on Reuters calculations, the revenue for the third quarter was 135.4 billion yuan.

Guo Ping, rotating chairman said that the performance was in line with expectations.

Trump used to place Huawei on the U.S. Export Blacklist and bar it from accessing U.S.-origin technology. It impeded Huawei’s ability to develop its own chips or source parts from vendors outside of America.

Huawei’s smartphone business has been severely affected by the restrictions. In September, Eric Xu, rotating chairman of Huawei’s mobile division stated that revenues from smartphones would fall between $30 billion-$40 billion in 2018.

Although Huawei didn’t break down third quarter numbers by business segment in its report, it stated that its decline was primarily attributable its consumer business.

According to Counterpoint Research, Huawei held 8% of China’s smartphone market in the third quarter. This is a decrease from the 30% it held a year ago when it was market leader.

Counterpoint stated that Honor, which was formerly Huawei’s sub-brand, has sold 96% of its phones to increase its share in China.

Huawei seeks to create new revenue streams beyond base station infrastructure and handsets. This includes a cloud business and smart ports and mining businesses.

The Harmony operating platform was launched on iPhones in June. It is now looking for software suppliers to automobile companies.

However, these new lines may not be immediately fruitful, according to executives.

Ren Zhengfei’s daughter, the company’s chief financial officer, returned to give the company a boost. Meng Wanzhou, who had spent almost three years fighting extradition from the U.S. to Canada in Canada for her freedom, returned Monday to its headquarters to resume work. Chinese officials indicated that the case against Meng Wanzhou was dropped to break a diplomatic deadlock.

($1 = 6.3910 renminbi)