ZTE 1Q profit to double, thanks to 4G orders

ZTE’s first quarter profit will at least double from the same period last year, thanks to 4G orders and strengthening of core operations.

The company has issued guidance for net profit to increase between 107.3 percent and 210.7 percent to RMB 425 million to RMB 637 million in the first quarter,  according to ZTE’s preliminary results announcement filed to the Hong Kong stock exchange today.

Basic earnings per share will be between RMB 0.12 and 0.19, compared to RMB 0.06 a year earlier, based on pre-audited financial data.

ZTE expects to record significant increases in both first quarter gross profit and gross profit margins, as the company continued to focus on servicing higher-margin contracts. Operating revenue from 4G infrastructure systems in China as a percentage of overall revenue increased, while gross profit margins for international projects improved.

The profitability of the company’s principal business recorded a relatively significant increase. It is expected that net profit after extraordinary items attributable to shareholders of the listed company will be over RMB 583 million in the first quarter, compared to a loss of RMB 615 million a year earlier.

ZTE is optimistic about the company’s business prospects as global 4G network deployments accelerate and demand for 4G mobile devices increase.

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