ZTE Returns to Profit on Asset Sale After Two Straight Losses
ZTE Corp. (763), China’s second-biggest maker of mobile-phone equipment, returned to profit in the first three months of this year because of an asset sale, after posting two straight quarterly losses.
Net income rose 36 percent to 205 million yuan ($33 million) from 150.9 million yuan a year earlier, the company said in a statement to the Shenzhen stock exchange yesterday. That compared with estimates of 25 million yuan, 52 million yuan and 200 million yuan, according to a Bloomberg News survey of three analysts conducted by e-mail.
ZTE reported a loss of 2.84 billion yuan for 2012 that was triggered by delays in contracts and international projects in the third and fourth quarters. The company on Jan. 20 projected it would return to profit in the first quarter of this year after selling a stake in Shenzhen ZNV Technology Co. that would produce investment income of more than 820 million yuan in the first quarter.
Sales in the first quarter fell by 2.8 percent to 18.1 billion yuan, from 18.6 billion.
ZTE fell 0.5 percent to close at HK$12.40 in Hong Kong trading, before the earnings announcement. The shares have dropped 5.1 percent this year, compared with a 0.5 percent decline for the benchmark Hang Seng Index.
Unlisted Huawei Technologies Co. is China’s largest maker of mobile-phone equipment.
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