ZTE Warns of Upcoming Losses
China's No. 2 telecom-equipment maker ZTE released preliminary and unaudited results in a statement posted on its website. The company expects to post a net profit loss of 1.9 billion-2 billion yuan ($301 million-$317 million) for its third quarter, which ended Sept. 30. This is in sharp contrast to the 299-million-yuan ($47 million) net profit in the same period last year.
ZTE also expects a loss for the January-September period. In the statement the company said it would lose around 1.65-1.75 million yuan ($262 million-$277 million); that figure was positive for the firm in the first nine months of 2011, at 1.07 million yuan ($170 million).
The company attributed the turn in its fortune to the postponement of a number of foreign projects, plus weakness in the domestic, broader Asian, and European markets. It also mentioned that the U.S. Commerce and Justice departments are currently investigating the firm's activities in Iran. ZTE says it is "lending our cooperation" to the probe.
ZTE is currently China's second-largest telecom-equipment maker in terms of sales, behind China's (and the world's) top such firm, Huawei. The latter took the leading position after displacing European manufacturer Ericsson this past summer.
The article ZTE Warns of Upcoming Losses originally appeared on Fool.com.Eric Volkman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.