ZTE on Wednesday reported massive growth in net profit for the first half of 2014, driven by carrier spending on 4G network equipment.
The Chinese vendor posted net profit of 1.13 billion yuan (€138 million) for the first six months of the year, an increase of 264% on the same period in 2013. The figure was in line with an upgraded forecast the company unveiled in July following strong 4G network equipment sales.
In a statement accompanying its 1H numbers, ZTE confirmed that 4G rollouts did indeed have a positive impact on its numbers.
In its home market ZTE reported operating revenue of CNY19.3 billion (€2.35 billion), up 2.7% on the previous year, in no small part due to the rollout of 4G networks by China's big three operators. However, revenue from its international business fell by 1.7% and as a result group operating revenue came in almost flat at CNY37.7 billion (€4.6 billion).
China accounts for 51.09% of ZTE's operating revenue.
ZTE's carrier networks revenue – across its domestic and international units - grew by 14.6% to CNY21.8 billion, while revenue from handset terminals declined by 16.5% to CNY10.4 billion.
"[The] year-on-year decline in the group's operating revenue from handset terminals was mainly attributable to the decrease in operating revenue from 3G handsets in the domestic market," ZTE said.
The vendor forecasts that net profit will more than treble in the first nine months of the year due to ongoing strong momentum in the 4G business.
"In connection with carriers' networks, the telecommunication industry will welcome a new investment cycle with large-scale deployment of 4G networks around the world, especially the issue of 4G licences in China and the approval of the trial operation of TD-LTE/LTE FDD hybrid networking," ZTE said.
It expects net profit for the nine months to be between CNY1.7 billion and CNY1.9 billion, an increase of 208%-245% on last year's figure.