Gateway Posts Loss in 1st Quarter
Apr 21, 2003
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Computer maker Gateway Inc. posted a first-quarter net loss of U.S. $200 million, which it attributed to its restructuring efforts and the sluggish U.S. economy. For the quarter ending March 31, Gateway reported revenue of $844 million, down from $992 million for the first quarter of 2002. The net loss for the quarter amounted to $0.62 a share, compared to the net loss of $126 million, or $0.39 per share a year earlier. The loss for the latest quarter included a $78 million restructuring charge for store closings and job cuts. Gateway founder and chief executive Ted Waitt said "We're going through a major transformation of our business, but we are already seeing results — stronger sales of mid to high-end PCs, growth of higher margin, non-PC products and lower costs." Gateway, the U.S.'s No. 4 computer maker, has been working to cut costs and boost sales amid an industrywide downturn. Last month, it closed 80 stores and shed 1,900 jobs, or 17 percent of its work force, as part of an effort to save about $400 million a year. In the last 2 years, the company has eliminated about 10,000 jobs. The company said it still expects to be profitable and have more than $1 billion in cash and securities by the end of the year. Gateway sold 506,000 PCs in the first quarter, down 22 percent from the first quarter last year. It said the drop was largely due to its new focus on selling higher-end PCs. The average price of units sold rose to $1,670, the highest level in 2 years. Sales of non-PC services and products, such as plasma-screen televisions, accounted for 24 percent of revenue, up from 20 percent a year earlier. (Reuters)

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