US investigations into ZTE are part of the reason the Chinese telecommunications equipment maker expects a huge net loss in the first nine months of this year.
For the first three quarters, the Hong Kong-listed firm announced yesterday it expected a net loss of 1.65 billion yuan (HK$2.03 billion) to 1.75 billion yuan, in contrast to a net profit of 1.07 billion yuan in the same period last year.
For the third quarter, ZTE forecasts a net loss of 1.9 billion yuan to two billion yuan, in contrast to a profit of 299.27 million yuan in last year's third quarter.
The company's expected loss for the first nine months is a far cry from a Bloomberg consensus forecast by 27 analysts of a net profit of 2.16 billion yuan for the whole of this year.
The US departments of justice and commerce were investigating ZTE's deals with Iran, ZTE said. "We are lending our co-operation in respect of such investigations," the company said. "Our operating results were adversely affected by the Iranian market."
On October 8, US internet equipment maker Cisco Systems announced it had cut ties with ZTE over the latter's Iranian business. In July, 17 US lawmakers called on US Treasury Secretary Tim Geithner to investigate ZTE over claims it sold a surveillance system and banned US computer equipment to Iran.