ZTE with record $1 billion loss for 2018

March 28th, 2019   Penny Snow   news Tags:

ZTE went through Really rough times last year since of the ban imposed on the manufacturer by the U.S. Commerce Department in April 2018. The ban nearly forced the manufacturer to shut down but three months later, it reached to deal by paying fines.

ZTE posts a record $1 billion loss

However, that ban put a significant toll on the company’s finances. For the year 2018, ZTE — one the leading telecom equipment manufacturer in the world, announced an annual loss of whopping 6.98 billion yuan, what roughly converts to $1.04 billion.

Whereas the loss is within the company’s own estimate of loss ranging from 6.2 billion to 7.2 billion yuan, but it’s even worse than the 6.2 billion yuan predicted loss by the analysis of investment firms. The company’s annual gross is announced to be 85.5 billion yuan in 2018, down 21.4% from 2017.

It’s noteworthy that the manufacturer did manage to take the stuff back to normal during the last quarter of 2018, i.e. from October to December during which the manufacturer posted a 276 million yuan net profit, what roughly converts to $41 million, with revenue amounting to 26.7 billion yuan.

Shenzhen-based ZTE mainly attributed its biggest annual loss to the $1 billion penalties that the manufacturer paid to the US government last year as settlement for breaching the terms of an earlier deal on trade sanctions violations.

In order to rescind the ban, ZTE agreed to pay $1 billion in fines and put $400 million in escrow as a down payment against future violations. Furthermore, the manufacturer agreed to overhaul its board and executive team. For those who are unaware, the ban was imposed on ZTE for selling goods to Iran and North Korea, both of what was under U.S. Economic sanctions at the time.

Despite going through hard times, the company hasn’t given up on innovating. The company is working on two concept phones with a high screen-to-body ratio. Whereas one uses a side sliding panel to house all digital cameras and sensors, the another uses a flap that juts out from the side of the smartphone to carry the selfie snapper. It is Furthermore working on a foldable telephone.

Read also: Huawei starts 5G tests in India whenever government’s invitation

As claimed by the information, released by Counterpoint Research, ZTE was the fourth most popular telephone brand in the U.S. with an 11% market share in the first quarter of 2018. But, from the second quarter through the end of the year, ZTE fell out of the top 5.

Going forward, the company is planning to ratchet up investments in 5G technology research and development, together with cybersecurity initiatives, to support the deployment of next-generation mobile networks about the world.

Via

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