ZTE is having a terrible week.
Shares of the Chinese tech giant plummeted by as much as 15% on Thursday as investors reacted to a management overhaul, disappointing financial results and a warning from the company that it could face charges in the U.S.
ZTE shares had been suspended since early March, when the smartphone and telecom-equipment maker was accused of violating U.S. trade rules. Regulators have alleged that ZTE set up several shell companies in order to skirt trade sanctions on Iran.
The company said Wednesday that the investigation could result in criminal and civil penalties, and that it was not yet able to assess the financial impact to the firm. ZTE reiterated that it was cooperating with investigators.
In a related blow, ZTE said that sales and net profit for 2015 were lower than preliminary estimates issued in January. The revisions were attributed to export restrictions imposed by U.S. authorities.
The disclosures follow a reshuffle of ZTE’s executive ranks earlier this week that included the replacement of three senior managers. The company’s chief technology officer, Zhao Xianming, was named as new president and CEO.
Despite the wave of bad news, industry analysts found reasons for optimism. In late March, the U.S. government temporarily lifted the company’s export curbs, which have allowed its supply chains to return to normal.
The management changes also suggest “progress in [ZTE’s] negotiations with the U.S. government toward final resolution on this case,” said Nomura analyst Leping Huang.
The company is still likely to face a fine from the U.S. government, but Huang doesn’t think the case “will seriously affect ZTE’s business relationships with existing telecom operators.”
In a letter sent to the company’s staff on Tuesday, the company’s new CEO pledged to take “extra measures to ensure that legal compliance and anti-corruption processes eliminate any possibility of non-compliance.”