UPDATE 1-ZTE says 2010 net profit up 32 pct on better sales

Thu Jan 27, 2011 6:33am EST

* ZTE 2010 net profit 3.25 bln yuan vs 3.1 bln yuan f'cast

* After extraordinary items, net profit down to 2.8 bln yuan (Adds details, background, analyst quote)

HONG KONG Jan 27 (Reuters) - ZTE Corp (0763.HK)000063.SZ, China's No. 2 telecoms equipment maker, reported a better-than-expected 32.4 percent rise in 2010 net profit on Thursday, helped by improving demand for infrastructure projects.

ZTE said it expects to make a net profit of 3.25 billion yuan for the full year 2010, better than expectations for a 3.1 billion yuan net profit, according to a poll of 21 analysts surveyed by Thomson Reuters I/B/E/S.

The company made a net profit of 2.46 billion yuan in 2009, it said in a statement posted on the Hong Kong stock exchange. It also had to take a one-time extraordinary item that lowered its net profit to 2.8 bln yuan, but did not give any further details.

"The bottom line results look fairly positive," said Alen Lin, an analyst with BNP Paribas in Hong Kong. "Looking at the revenue figures, it's likely that India has already contributing to the company's numbers."

New Delhi banned Chinese telecoms equipment on security concerns for most of last year and only allowed sales to resume in September, hitting revenues at ZTE and its bigger rival Huawei Technologies [HWT.UL].

Together the two companies grew up selling equipment to the Chinese mobile market but have increasingly become formidable players on the world stage scoring major contracts in Europe and some developing countries.

In the United States, however, there has has been opposition from some factions that have raised concern about the security threats posed by a Chinese company selling telecoms equipment to U.S. operators.

"The U.S. has never counted much for ZTE, and I think this will likely remain the case for at least this year," said Lin at BNP Paribas. (Reporting by Kelvin Soh; Editing by Hans Peters)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.