ZTE forecasts 2016 revenues to climb 1% versus 2015.
ZTE said it expects first quarter net profits to reach between 1.15 billion yuan and 1.25 billion yuan ($167 million to $181 million), representing an increase of 21.1% to 31.7% compared to the same period the previous year.
According to company forecasts, revenues for the first quarter of 2017 will increase between 10% to 20% year-on-year, with overall revenue growth driven by its carrier networks and consumer businesses, the Asian vendor said.
For full 2016, ZTE projected a net loss of 2.36 billion yuan compared with a net profit of 3.2 billion yuan the previous year. The annual loss reflects the financial provision ZTE made against the 6.2 billion yuan penalty as part of the settlement with U.S. authorities, which investigated ZTE’s exports to Iran and North Korea. ZTE said without the financial provision it would have reported a net profit of 3.83 billion yuan in 2016, which would have been a 19% increase compared to the previous year.
ZTE also said it expects total revenues of 101.2 billion yuan for full 2016, representing a 1% year-over-year increase.
Commenting on the settlement with the U.S government, Earl Lum, President of EJL Wireless Research, said the agreement will allow ZTE to move forward and allow its shareholders to remain confident in the company’s forward looking business plans and financial results.
“I think this is huge event from the perspective I believe it implies ZTE no longer needs to undergo 60 day reviews from the U.S government. This will allow the company and its suppliers to return to a ‘business as usual’ situation,” Lum told RCR Wireless News.
“This incident helps ZTE to strengthen its own governance to avoid similar issues in the future,” said James Yan, research director at Counterpoint Technology Market Research, who added the settlement will benefit ZTE’s carrier network business. “ZTE will have more freedom to work with U.S. telecommunications operators, which will be more willing to work with ZTE to develop ‘5G’ technologies.”
