ZTE boosts profit on declining Q1 sales

News General China 29 APR 2013
ZTE boosts profit on declining Q1 sales

Chinese telecom equipment and mobile phone maker ZTE reported net profit up 35.9 percent to CNY 205 million in the first quarter, compared to the year-earlier period. ZTE’s EPS rose to CNY 0.06. The improvement came from ZTE’s operational review and a disposal gain from the sale of a controlling stake in telecom and video surveillance equipment subsidiary Shenzhen ZTE Netview Technology (ZNV) for CNY 1.3 billion.

The company’s gross margin has expanded for two consecutive quarters thanks to increasing cost control efforts. Revenue declined 2.8 percent to CNY 18.09 billion in the first quarter compared to a year earlier. ZTE said it has been able to achieve a better product and customer mix, and to improve its cost structure thanks to its focus on key products and markets, since the second half of last year. It achieved a combined savings of CNY 350 million in selling, administrative and research costs in the first quarter, compared to the first quarter of 2012.

For the second quarter, ZTE said it will concentrate on markets in which it claims strengths while vigorously expanding in the government, enterprise and service segments. The company will continue to improve resource management and control to enhance operating efficiency and resource management.  

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