(SinoCast via NewsEdge) ZTE Corp., China's second largest telecom equipment maker, posted a 50% drop in third-quarter earnings, amid lackluster spending by telecom firms.
Delays to Beijing's issue of licenses for 3G services, as well as price competition overseas, will also probably drag down full-year results, analysts say.
ZTE registered a net profit of 76.89 million yuan ($9.8 million) in the third quarter, based on Chinese accounting standards, compared with 154.83 million yuan ($19.7 million) a year earlier. This was much smaller than the 102.6 million yuan ($13 million) forecast by Deutsche Bank.
Third-quarter revenue was 5.43 billion yuan ($689.3 million), compared with 4.73 billion yuan ($600.5 million) a year ago.
The company's net profit for the first nine months fell almost 47% to 450.36 million yuan ($57.2 million) from 842.5 million yuan ($106.9 million) a year ago.
For next year, eight analysts polled by Reuters expect ZTE's net profit to increase by nearly 50% to 1.79 billion yuan ($227.2 million) from a forecast 1.2 billion yuan ($152.3 million) for the entire year.
ZTE and chief rival Huawei Technologies came to prominence as China's telecom carriers spent billions of dollars on networks from the 1990s, and used lower prices to compete with the likes of Ericsson, Motorola and Nortel.
While ZTE's sales have been largely confined to emerging markets such as India and Africa, it has recently been striking deals in mature markets such as the US and UK.
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