By Jiahui Huang
Shares of ZTE fell sharply after the Chinese telecom-equipment maker reported lower third-quarter earnings, missing market expectations.
The company's shares fell 4.45% to 30.30 Chinese yuan, equivalent to US$4.26, in Shenzhen early Tuesday, while its Hong Kong-listed shares dropped 6.8% to 19.62 Hong Kong dollars, equivalent to US$2.52.
ZTE said late Monday that third-quarter net profit dropped 8.2% from a year earlier to 2.17 billion yuan and total revenue fell 3.9% to 27.56 billion yuan.
Citi said ZTE's earnings were a miss, adding that the revenue decline was mainly due to the domestic carrier network business amid declining capital expenditures, analysts Louis Tsang and Kyna Wong said in a note.
Continued cuts to capital expenditures by telecommunications operators may weigh on ZTE's domestic carrier business, but the consumer segment could post higher revenue growth, Citi said.
However, Citi said one bright note was that ZTE maintained its cost control, with the company posting a 7% drop in operating expenses.
Looking ahead, Citi said it maintained a constructive view on domestic artificial intelligence server opportunities and the overseas carrier business for ZTE.
Citi has a HK$19.80 price target on the company's Hong Kong-listed shares.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
October 21, 2024 22:36 ET (02:36 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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