ZTE's full-year loss may reach $460M
ZTE issued an earnings warning for 2012, saying it may lose $400 million to $460 million for the full year, a reversal of 221 percent to 241 percent from 2011's results.
The expected loss stems from delays in the progress of some domestic and international network projects, the recognition of earlier lower-margin contracts and a drop in revenue for terminal products.
The company attempted to put a positive spin on the news, however, saying it expects to report a profit in 2013's first quarter as it executes a comprehensive strategic review begun last year to sharpen its focus on key products and markets and strengthen cash flow management.
Due to delays in the progress of some domestic and international network projects, the recognition of earlier lower-margin contracts and a drop in revenue for terminal products, ZTE may post a full-year net loss attributable to shareholders of the listed company of between
ZTE said it has more than 100 commercial and trial LTE networks deployed globally and holds an industry-leading position in dual-mode TD-LTE and FDD-LTE combined networks. The company said it also has risen from the No. 9 position in 2011 to No. 4 in the global smartphone market. ZTE's terminal division has shifted to higher-end segments in the U.S., China, Japan and Europe and away from emerging countries
The vendor committed to a number of "optimization measures" going forward, one of which involves streamlining its internal organization, which could be an indication of planned future job redundancies.
While ZTE struggles, its Chinese rival Huawei announced its expects to record an 8 percent year-on-year increase in global sales revenues for the full year 2012 and a 33 percent increase in net profit from the previous year.
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