Results of the first quarter of ZTE

Earlier this week, Chinese company ZTE has announced its ambitious plans - to reach the 2015 production of 100,000 smartphones annually. However, after summing up the official results of the first quarter of 2012, market analysts estimate the number of questionable realism of such plans. In the first three months, the company earned 150 million yuan (about $ 24 million), whereas a year earlier for the same period, revenues were $ 127 million. The analysts predicted a profit of around 180 million yuan. As a result, in March, the company ZTE said that profit fell by about a third. That is, this Chinese manufacturer of a situation similar to Huawei, which marked decline in revenues by 53% per year, while sales grew by 11.7%. According to analysts, the problem of Chinese companies is the low margins. Profitability ratio of gross profit for Huawei declined by 6.5 percentage points to 37.5%, whereas for ZTE decline was 2.03 percentage points to 30.26%. Unfortunately, the report said the company is not a margin in the first quarter.