By Juro Osawa
Chinese telecommunications equipment supplier ZTE Corp. said
Monday it likely swung to a net profit in 2013, after suffering a
hefty loss in the previous year, thanks to cost cuts and efforts to
cut back on low-margin business contracts.
In its preliminary financial results filed with the Hong Kong
stock exchange, ZTE said it expects a 2013 net profit in the range
between 1.2 billion yuan ($198 million) and CNY1.5 billion, a
reversal from a net loss of CNY2.84 billion in 2012.
ZTE said its total expenses in 2013, including those on sales
and distribution as well as research and development, fell
significantly from the previous year. It also cited improved
margins for overseas business contracts as reasons behind its
earnings recovery.
In interviews last year, ZTE executives said the company
expected to benefit from stronger demand in China, with the
country's major carriers deploying faster fourth-generation mobile
networks.
ZTE said it will disclose final earnings figures later, in its
2013 annual report.
The Shenzhen-based company is a major player in the market for
telecom networking equipment, though its revenue trails global
giants in that sector such as Sweden's Ericsson and China's Huawei
Technologies Co. In addition to telecom gear, ZTE sells
smartphones.
Write to Juro Osawa at juro.osawa@wsj.com
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