At a time when many infrastructure vendors are suffering, ZTE saw its net profits soar 29.8 percent in the first half of 2017 thanks to growth in the company’s carrier networks business and its consumer devices.
Net profit for the first six months of the year was $350 million, up from $270 million a year earlier. Earnings per share increased to $0.08 cents and revenues were up 13.1 percent to $8.28 billion.
ZTE said its carrier networks business grew 12.6 percent year-over-year primarily because of its work with LTE networks for Chinese operators. The company also said its European wireless business experienced strong growth in the first half of the year.
The company saw its smartphone business surge 15 percent in the first half of the year thanks to shipments to Australia, Germany, Canada, and Spain.
Like many infrastructure companies, ZTE is bulking up its research and development spending in anticipation of 5G. The company said it increased its spending to $1.02 billion in the first half of 2017. Most of the R&D is focused on 5G, the Internet of Things (IoT), and cloud computing. The company said it was ranked No. 1 by the World Intellectual Property Organization (WIPO) for its list of patents, and in March it said it had more than 1,500 patent applications related to 5G.
ZTE also said it has more than 60 “pre” 5G networks deployed, and more than 240 networks globally are using the company’s software-defined networking (SDN) and network functions virtualization (NFV) technology.
The company is also working extensively with fixed network operators in Germany, Spain, Japan, Russia, Thailand, and China on next-gen optical access and 100G optical transmission.
ZTE’s surge in profits is a welcome relief after the company suffered a net loss of $343 million in 2016 because of penalties it had to pay to the U.S. government for breaking sanctions with Iran and North Korea. The company said that in 2016 it would have posted a net profit of $81 million if it didn’t have to pay the $1.2 billion in fines.
According to Reuters, the company also was planning to cut about 3,000 jobs, or about 5 percent of its 60,000 employees at the beginning of the year. However, ZTE has never mentioned any layoffs in its earnings reports.