ZTE pushes profits up by 27.8% and says innovation stimulates growth
19 April 2017 | Alan Burkitt-Gray
ZTE has recorded a sharp increase in first-quarter profits, only a month after the company announced a huge annual loss because of a US fine.
The Chinese company said its profit for the first quarter of 2017 was 27.8% up on the 2016 figure, at the equivalent of $174 million. Revenue was up 17.8% to the equivalent of $3.73 billion.
In March 2017 ZTE agreed to pay the US Department of Commerce a penalty of $892 million plus an extra $300 million suspended for three years after admitting re-exporting US technology to Iran in breach of export rules.
As a result the company reported a loss of $111 million for 2016, even though revenue was up 1.04% to $14.6 billion.
ZTE said that innovation was helping its growth: it invested almost 13% of quarterly revenue in R&D in the first quarter – implying a spend of $480 million in the period.
The company said it was “on track to begin 5G pre-commercial deployments in the third-quarter of 2018, with full commercial deployment starting in 2019”.
Meanwhile ZTE announced the opening of a network operations centre in Uganda to be used by the local operation of MTN.