ZTE posts third straight quarterly profit decline
HONG KONG, March 28 — China’s ZTE Corp , the world’s fourth-largest handset producer and fifth-ranked telecommunications equipment maker, posted a 48 per cent drop in fourth-quarter net profit, the third straight quarter of falls, dented by weak telecoms spending in Europe and narrower margins on mobile handset sales.
ZTE and bigger rival Huawei Technologies Co Ltd have diversified from selling telecoms network gear, a segment in which growth has slowed, into consumer electronics such as smartphones and tablet PCs.
ZTE’s October-December net profit slid to 991 million yuan (RM482 million) from 1.89 billion yuan a year earlier. The result compared with a forecast of 2.16 billion yuan, according to Reuters calculations using unaudited figures for the first nine months.
Full-year net profit fell 36.6 per cent to 2.06 billion yuan, lagging a forecast for 3.23 billion yuan from a Thomson Reuters I/B/E/S survey of 23 analysts.
ZTE shares, valued at US$9 billion (RM27.45 billion), have slumped 13 per cent in the past two weeks, lagging Hong Kong’s benchmark Hang Seng Index, which is down more than 2 per cent over the same period amid skepticsim over the company’s outlook for its main telecoms equipment business. — Reuters