ZTE, the Chinese telecom equipment and smartphone maker reported a sharp increase in its profits as well as revenue in the January-March 2017 quarter. This comes right after the company announced heavy losses owing to the fines levied by the US government in 2016. (See: US Removes Chinese Vendor, ZTE From Blacklist and Chinese Brand ZTE Fined $1.2 Billion by US Government for Illegally Shipping Network Equipment to Iran and North Korea.)
The Chinese company revealed that its year-on-year profit for the Q1 2017 was up by 27.8%. In other words, the company recorded a revenue of CNY25.75 billion (17.8% increment) which resulted in CNY1.21 billion profit during January-March.
Although a proper breakdown by business unit for the said period wasn’t made available by the company, it attributed the huge rise in profits to the carrier network and smartphone sales in Q1. As far as smartphones are concerned, it posted year-on-year growth in markets like the US, Russia, Germany, and Australia.
Recently, ZTE was accused of violating US trade sanctions following which the company reported a net loss of CNY2.36 billion ($343 million). Soon, ZTE plead guilty of re-exporting the US technology to Iran and complied to pay a penalty of $892 million. Only then, the US Commerce Department removed ZTE from the list of blocked companies.
“Without the provision, ZTE would have posted a net profit of CNY3.83 billion, 19.2 per cent higher than a year earlier,” it stated.
ZTE CEO Zhao Xianming commented on the admission of violating US trade sanctions saying that it is “turning the page on a challenging chapter in our past and is optimistic of our future.”