(Yicai) April 28 -- Haier Smart Home, a Chinese supplier of Internet-of-Things-connected appliances and tailored smart living solutions, reported a 15 percent drop in first-quarter profit from a year earlier, which it mainly attributed to poor winter weather in North America and higher import tariffs.

Net profit was CNY4.65 billion (USD680 million) in the three months eded March 31, the Qingdao-based company’s earnings report showed late yesterday. Operating revenue fell 6.9 percent to CNY73.7 billion (USD10.7 billion).

Severe weather, including snowstorms, caused a 10 percent slump in the industry in the North America market, Haier Smart Home said, adding that there was also a significant year-on-year increase in tariff costs.

Shares of Haier Smart Home [SHA: 600690] closed up 4 percent at CNY21.34 (USD3.12) each in Shanghai today. The stock is down a little over 18 percent since the end of last year.

Weak demand in China’s home appliance market also weighed on earnings, the company said. According to data from home appliances research firm AVC, total retail sales of home appliances in the Chinese market (excluding computer, communication, and consumer electronics) fell 6.2 percent in the quarter.

During the period, Haier Smart Home stepped up reforms to navigate tariff pressure and softer demand, it said. In China, the firm expanded its direct-to-user sales model, with such orders accounting for 65 percent of the total, up from 57 percent in the same period of last year.

At the same time, the firm sped up the integration of its large HVAC (heating, ventilation, and air conditioning) business, with domestic residential air-conditioner revenue growing against the trend in the quarter and European HVAC revenue rising by more than 20 percent. In addition, Haier Smart Home used artificial intelligence to boost efficiency across all processes.

The company also noted that overseas earnings outside of North America grew, and it accelerated development in emerging markets and advanced the transformation of its European business.

Editor: Tom Litting