SHENZHEN, China-Reports are streaming out of China that ZTE Corp.’s net earnings fell 47 percent during the first half of 2006 compared to the same period last year.
The company blamed its lackluster earnings on a slowdown in sales within its home turf along with stiff competition from other vendors in international markets.
Though the company could not be reached to confirm the news, Chinese news organizations reported that ZTE posted net profits of $43.6 million compared to $82.89 million in the same period in 2005. Sales reportedly crept up to $1.32 billion thanks to emerging markets, which grew 25.8 percent to $497.37 million.
Sales in China slipped 8.8 percent to $818.9 million as carriers continue waiting for third-generation licenses to be issued by the government.
ZTE’s president, Yin Yimin, told the Chinese press that the company’s increased research and development spending has also contributed to its financial results.
While ZTE has won several contracts in developing markets, rival Chinese vendor Huawei Technologies Co. Ltd. has won contracts in Western markets, which generally produce more revenue for equipment vendors than contracts in emerging markets.
