By Waverly Colville
ZTE Corp. expects to record more than $1 billion in losses through the first half of this year as the Chinese telecommunications giant has grappled with a now-lifted ban on U.S. companies doing business with it.
The company said Friday in a preliminary report it expects its losses to be between 7 billion and 9 billion yuan ($1.05 billion and $1.34 billion), compared with a profit of 2.3 billion yuan in the year-ago period. On a per-share basis, ZTE is expecting a loss between 1.67 yuan and 2.15 yuan. A year earlier, its profit was 0.55 yuan a share.
ZTE had halted major business operations less than a month after the U.S. Commerce Department in April banned American companies from selling products to it. The Commerce Department accused ZTE of engaging in sanctions-busting sales to Iran and North Korea.
The Commerce Department on Wednesday said it had reached an agreement with ZTE regarding the process by which the firm would deposit $400 million into an escrow account as part of a penalty for its violations of an earlier settlement, the Wall Street Journal reported. Once ZTE deposits the money, the department will allow it to resume buying products from U.S. suppliers.
ZTE also overhauled its board and senior leadership team last month, with all 14 directors resigning in a bid to satisfy U.S. demands. The company also will fund a team of U.S. compliance officers to monitor operations for 10 years.
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