ZTE forecasts Q3 losses

China’s second largest telecom equipment company ZTE (000063.SHE, 0763.HK) warned that it is likely to post losses of more than US$300 million in the third quarter, The Wall Street Journal reported. The company said in stock exchange filings in Shenzhen that it expected to lose between US$303.2 million and US$319.1 million but did not elaborate. Last year, the telecommunications giant made a net profit of US$47.7 million, thanks in part to its low-cost products that sell well in emerging markets. The profit warning follows on first-half losses at closely held Huawei Technologies (002502. SHE), the country’s largest telecom equipment company, with operating profits down 22% from the previous year, the company said in July. ZTE has attributed second and third quarter revenue declines to weak domestic orders and postponement of overseas projects. A US congressional report on Huawei and ZTE last week stated their entry into the US market could be a threat to national security.