ZTE expects its 2014 profit to almost double, bolstered by growth in its domestic 4G business as well as its international handset sales.
In preliminary results issued today, the company reported a profit attributable to shareholders of CNY2.64 billion (US$424 million), up 94.2 per cent year-on-year, on revenue of CNY81.24 billion, up 8 per cent.
In addition to its 4G and devices growth, ZTE also said that ongoing improvements in contract profitability has boosted its gross profit margin for the period.
The company has been focussing its efforts on profitability for some time, and it has benefitted from the efforts of China’s operators to rapidly build-out 4G networks.
And this particular revenue stream is not yet exhausted: last week ZTE picked up a contract to supply FDD-LTE equipment to China Telecom.
It also noted “enhanced” control of financial expenses, such as the reduction of interest payments and the management of foreign exchange exposure.
ZTE’s full annual results for 2014 will be announced on 25 March 2015.
Last week major rival Huawei also posted strong unaudited financial results for 2014. The vendor expects an operating profit of CNY33.9-34.3 billion – an increase of almost 18 per cent over 2013 – with revenue up 20 per cent to CNY287-289 billion.