ZTE raises forecast for six-month profit thanks to strong 4G sales

Net profit expected to rise to between RMB 1 billion and RMB 1.15 billion (223% and 271% ) compared with the first six months of 2013

ZTE raises forecast for six-month profit thanks to strong 4G sales

ZTE has raised its forecast for 2014 first-half net profit to between RMB 1 billion (£93.9m) and RMB 1.15 billion (£108m) following increased sales of its 4G LTE infrastructure, better productivity and improved profitability in international contracts.

This represents an increase of between 223% and 271% compared with the six months a year earlier. The revised guidance published yesterday (14 July 2014) by ZTE compares with earlier guidance issued in April 2014, which predicted a net profit of between RMB 800 million (£75m) to RMB 1 billion for the six months ending 30 June 2014.

ZTE said it continued to strengthen cost control and operational management, achieving improved profitability in international contracts. 4G infrastructure accounted for an increased proportion of revenue.

In the Operators division, ZTE’s business is strengthening among mainstream customers in major markets. The company claimed it retained its position as the leading vendor of 4G infrastructure to China Mobile, achieving increased market share in the tender this year. ZTE also consolidated its position as the leading vendor of 4G infrastructure to China Telecom and China Unicom.

Following the launch of new LTE multiband smartphones this year, the company forecasts that 4G devices will account for 40% of total terminals shipments in 2014. ZTE achieved strong performance in the United States, especially in the prepay handset market, benefiting from the availability of new innovative products and cooperation with partners.

In the Enterprise Business division, ZTE said it is maintaining fast growth. ZTE’s Smart City solutions are deployed in 108 cities in China, while the company’s information technology applications and solutions are used by customers including Tencent, Bank of China, China FAW, PetroChina, and China Eastern Airlines to deliver improved operational agility and efficiency.

ZTE expects its business will benefit from the award of FDD-LTE (frequency division duplexing LTE) licenses in China, and the investment in 4G networks in markets such as Japan and India. ZE also expects the consolidation in the telecommunications market in Europe will also offer new opportunities for ZTE. In the Mobile Devices division, ZTE expects to benefit from strong overseas operations.

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