ZTE revises Q1 to a huge net loss - Mobile World Live

ZTE revises Q1 to a huge net loss

27 JUL 2018

ZTE posted a downward revision of its Q1 earnings to account for the impact of a recent trade ban in the US, reversing what was a profit to a substantial net loss of more than CNY5.4 billion ($790 million).

The vendor previously reported a profit of CNY1.8 billion for the first three months of 2018, a figure that was up from a profit of CNY1.2 billion in Q1 2017.

However, updated non-operating expenses of CNY6.7 billion stemming from the US trade ban easily drowned out that figure. ZTE previously posted CNY28 million in non-operating expenses.

The US is a key supplier of components for ZTE and in May the company was forced to suspend operations after US officials implemented a seven-year trade ban for sanctions violations. However, the US lifted the ban and ZTE was able to resume trading in mid-July after it agreed to pay fines totalling $1.4 billion and change its leadership.

In mid-July, the company said it expected to record a heavy loss in the first half of the year as a result of the shutdown and fines, noting the loss could total between CNY7 billion and CNY9 billion. The change would represent a decrease of between 400 per cent and 500 per cent from a profit of nearly CNY2.3 billion in the first half of 2017.

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Diana Goovaerts

Diana is Mobile World Live's US Editor, reporting on infrastructure and spectrum rollouts, regulatory issues, and other carrier news from the US market. Diana came to GSMA from her former role as Editor of Wireless Week and CED Magazine, digital-only...

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