ZTE Corp profit up, but stock goes down
Posted on Oct-28-2007· by china investor
BEIJING, Oct. 27 — Corp shares tumbled yesterday after the country’s biggest public telecommunications equipment maker’s results failed to meet market expectations for the first nine months.
Shenzhen-based ZTE, however, generated a net profit of 603 million yuan (79.34 million U.S. dollars) in the period, 45.92 percent growth year-on-year, while global giants such as Ericsson reported a decline in profit during the third quarter.
ZTE’s earnings per share was 0.63 yuan in the first nine months, below a 0.96 yuan forecast by Shanghai Securities. ZTE’s 2007 performance is also less than Guodu Securities’ estimate of 1.39 yuan.
Shenzhen-listed ZTE’s share price dropped 6.09 percent to close at 52.12 yuan while the Shenzhen Composite Index gained 1.82 percent yesterday.
ZTE’s business growth slowed due to the delay of the roll out of 3G, industry insiders said.
ZTE announced in the second quarter that it was the biggest equipment provider of China Mobile’s national 3G network, which is based on home-grown technology.
ZTE’s revenue was 23.45 billion yuan up to September this year, representing an increase of 46.95 percent year-on-year, thanks to both 2G and 3G network orders in the domestic market and rapid overseas expansion, the company said.
Chinese firms, including ZTE and Huawei, have grabbed many China Mobile and China Unicom’s deals from foreign giants like Ericsson, according to media reports.
Sweden-based Ericsson on Thursday posted a 36 percent drop in third-quarter net profit.
”The domestic telecommunications market enjoyed stable growth during the nine months. ZTE had gained fast growth in emerging markets in Asia and Africa,” ZTE said in a public statement.
(Source: Shanghai Daily)
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