The Inquirer reports ZTE announced a big fall in profit of 60 to 80 percent to somewhere between $24 million to $48 million. To blame is a poor investment in Nationz Technologies, the Eurozone debt crisis and increased competition in the budget smartphone market.
ZTE has seen its business grow considerably in recent years, especially with its smartphones doing well in the budget market. However, the firm has announced that it expects profits to decline sharply from the previous year. The company has announced its interim first half 2012 results, in which it forecast a drop of profits of between 60 to 80 per cent for the period 1 January through 30 June 2012.
By ZTE's own admission its figures are a "substantial decrease", with the firm attributing it to a decline in investment income after it dumped shares in Nationz Technologies. According to the company, it longer "exercised significant influence over the operating activities" of Nationz Technologies.
ZTE also cited currency depreciation and the ongoing Eurozone debt crisis, while admitting that it had failed to meet sales growth forecasts and saw a decrease in gross profit margins.