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ZTE May Post Third-Quarter Loss on Delays in Overseas Projects

ZTE Corp. (000063), China’s No. 2 mobile- phone equipment maker, said it may post a third-quarter loss of as much as 2 billion yuan ($319 million) after delays in some overseas projects and collective purchasing by local carriers.

The net loss would compare with 299 million yuan in profit in the same period last year, the company said in a statement to the Shenzhen Stock exchange. Net loss in the first nine months may be between 1.65 billion yuan and 1.75 billion yuan, against a profit of 1.07 billion yuan in the comparable period last year, it said.

Sales for the July-to-September quarter may have fallen about 13 percent from last year, according to the statement. The gross margin may have slipped by 13 percentage points over the same time last year because of the recognition of some low- margin contracts in the period, it said.

ZTE’s operational results may also be “negatively impacted” as the company and its subsidiaries are being investigated by U.S. Department of Commerce and Department of Justice for its dealings with Iran, the statement said without elaborating. The company is assisting the investigations, it said.

--William Bi. Editors: Vidya Root, Alex Nicholson

To contact Bloomberg News staff for this story: William Bi in Beijing at wbi@bloomberg.net

To contact the editors responsible for this story: Neil Western at nwestern@bloomberg.net;

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