ZTE Corp swings to first-quarter profit of 862.6 million yuan

FILE PHOTO: The logo of China's ZTE Corp is seen on a building in Nanjing, Jiangsu province, China April 19, 2018. REUTERS/Stringer

HONG KONG (Reuters) - China’s ZTE Corp reported on Monday a first-quarter profit of 862.6 million yuan ($128.2 million), as expected, up from 276 million yuan in the preceding three months, as it recovered from last year’s U.S. sanctions.

The world’s fourth-largest telecommunications equipment maker by market share also forecast a net profit of 1.2-1.8 billion yuan for the first half of 2019.

The quarterly profit was toward the lower end of the company’s forecast range of 800 million to 1.2 billion yuan.

It reported a net loss of 5.4 billion yuan for the corresponding quarter a year earlier, which booked the impact of a crippling U.S. supplier ban that has now been lifted.

Revenue dropped 19.34 percent to 22.2 billion yuan in January-March, from 28.88 billion yuan a year earlier.

ZTE was forced to stop most business between April and July last year due to U.S. sanctions.

The sanctions were lifted after ZTE paid $1.4 billion in penalties. The company reported its worst half-year loss of 7.8 billion yuan in August.

Reporting by Sijia Jiang; Editing by Louise Heavens and Mark Potter