Friday, April 18, 2003
Struggling computer-maker Gateway on Thursday posted a first-quarter net loss of US$200 million, which it attributed to its restructuring efforts and the sluggish economy. For the quarter ending March 31, Gateway reported revenue of US$844 million, down from US$992 million for the first quarter of 2002. The net loss for the quarter amounted to 62 cents a share, compared to the net loss of US$126 million, or 39 cents per share a year earlier. The loss for the latest quarter included a US$78 million restructuring charge for store closings and job cuts. 'Our performance in the first quarter was affected by the weak economic environment as well as our shift to higher value products and services,' Gateway founder and chief executive Ted Waitt said in a statement. '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 No 4 US computer maker, has been working to cut costs and boost sales amid an industry-wide downturn. Last month, it closed 80 stores and shed 1,900 jobs, or 17 per cent of its workforce, as part of an effort to save about US$400 million a year. In the last two years, the company has eliminated about 10,000 jobs. Gateway, founded in 1985, lost US$309 million last year, and US$1.03 billion in 2001. Gateway sold 506,000 PCs in the first quarter, down 22 per cent 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 US$1,670, the highest level in two years. Sales of non-PC services and products, such as plasma-screen televisions, accounted for 24 per cent of revenue, up from 20 per cent a year earlier.
By: DocMemory
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