April 27, 2018 / 2:40 PM / in a year

China's ZTE makes record first quarter profit, but U.S. sanctions cloud outlook

HONG KONG, April 27 (Reuters) - China’s ZTE Corp , the subject of U.S. sanctions imposed last week, posted a 39 percent rise in first-quarter net profit on Friday due to improved sales in its telecom equipment and consumer businesses.

January-March profit reached 1.69 billion yuan ($267 million) from 1.2 billion yuan in the same period a year earlier, ZTE said in a statement to the Shenzhen stock exchange.

ZTE’s latest figure represents the highest first quarter net profit on record.

However, the outlook for ZTE is overshadowed by the United States banning American companies from selling it components for seven years, saying the Chinese firm had broken a settlement agreement with repeated false statements.

ZTE said the move threatened its survival.

ZTE, China’s second-biggest telecom equipment maker after Huawei Technologies Co Ltd, postponed its earnings release from last week as it studied the impact of the U.S. ban.

The ban also led to a suspension in trading of ZTE’s mainland- and Hong Kong-listed shares, which is still in effect. ($1 = 6.3358 Chinese yuan renminbi)

Reporting by Anne Marie Roantree Editing by Alexander Smith

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