ZTE first quarter 2014 profit to surge as 4G orders lift business outlook

ZTE issues guidance for net profit to increase between 107.3% and 210.7% to between RMB 425 million and RMB 637 million; company optimistic about business prospects

ZTE first quarter 2014 profit to surge as 4G orders lift business outlook

ZTE is forecasting that the company’s 2014 first-quarter profit will be at least double that of the same period last year. It said that the increase reflects the strengthening of its core operations, especially 4G.

Net profit attributable to shareholders of the listed company will be between RMB 425 million (£40.8m) and RMB 637 million (£61.2m) in the first quarter, a year-on-year increase of between 107.3% and 210.7% according to ZTE’s preliminary results announcement filed to the Hong Kong stock exchange last week (10 April 2014).

ZTE expects to record significant increases in both first quarter gross profit and gross profit margins, as the company continued to focus on servicing higher-margin contracts. Operating revenue from 4G infrastructure systems in China as a percentage of overall revenue increased while gross profit margins for international projects improved.

The profitability of the company’s principal business recorded a relatively significant increase. It is expected that net profit after extraordinary items attributable to shareholders of the listed company will be over RMB 583 million (£56m) in the first quarter, compared to a loss of RMB 615 million (£59.1m) a year earlier.

ZTE is optimistic about the company’s business prospects as global 4G network deployments accelerate and demand for 4G mobile devices increases.

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