ZTE’s Profit Dives 65% as It Tries to Move Past U.S. Ban – Bloomberg
What happened: ZTE’s quarterly earnings fell by 65%. The company reported a net income of just RMB 564.5 million, despite its projections of more than RMB1 billion. Revenue for the period also slid by 14% to RMB 19.3 billion. The company has lost around $17 billion in value this year.
Why it’s important: ZTE is recovering from a US ban that prevented it from sourcing American-made components. The company was forced to pay more than $1 billion in penalties to have the moratorium lifted after it violated US sanctions on Iran and North Korea. ZTE, along with rival Huawei, have been banned in Australia over national security concerns. The company has attempted to lower costs, particularly in its sluggish smartphone division. It is also focussing on emerging markets, where analysts say there is less concern about the company and more trust in China.