Chinese firm ZTE sees third-quarter profit after $1.1 billion loss

Chinese firm ZTE sees third-quarter profit after $1.1 billion loss
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Chinese telecommunications giant ZTE says it is rebounding after suffering a massive earnings loss when the United States banned it from purchasing equipment from U.S. suppliers.

The company said Thursday that it is poised to post third-quarter profits after taking a $1.1 billion loss in the first half of the year, its worst ever.

The numbers show how the U.S. Department of Commerce’s ban on ZTE working with U.S. companies, which caused it to momentarily cease operations, heavily impacted the company.

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Commerce imposed the penalties after it found that ZTE had violated sanctions the U.S. had imposed on Iran and North Korea.

The Trump administration struck a deal with China in June to ease the penalties, allowing ZTE to resume business.

Lawmakers had pushed to include a provision in the annual defense policy bill that would have blocked the deal, but the provision was stripped from the final bill that President TrumpDonald John TrumpLondon terror suspect’s children told authorities he complained about Trump: inquiry The Memo: Tide turns on Kavanaugh Trump to nominate retiring lawmaker as head of trade agency MORE signed earlier this month.

The company, along with its bigger Chinese rival Huawei, have been facing pressure from U.S. lawmakers who see the companies as a national security threat.

Lawmakers fear that Huawei and ZTE could provide a backdoor for the Chinese government to spy on Americans.

The Pentagon has already acted on such concerns, barring ZTE and Huawei products from being sold on U.S. military bases.

Last week, Australia said that it would ban Chinese telecommunications firms that could be pressured into helping the Chinese government from its 5G technology push.