We will be lucky if anyone believes the ship has turned this fast no matter what the earnings,, may get lucky as GTW looks a bit sad but is holding price-- so far,,
LOS ANGELES, Jan 20 (Reuters) - Gateway Inc. <GTW.N>, the
No. 2 direct seller of PCs, on Thursday said its fourth-quarter
profits dropped, blaming the slip on computer chip supply
problems and a Y2K-related business sales slowdown.
Still, Gateway, known for its quirky black-and-white cow
image, sounded an upbeat note for the current year, saying it
expected its partnership with America Online Inc. <AOL.N> --
the Internet services provider that agreed to buy Time Warner
Inc. <TWX.N> -- to open up growth opportunities.
San Diego-based Gateway said net earnings for the three
months ended Dec. 31 dropped to $126 million, or 38 cents a
share -- a penny above reduced expectations -- compared with
$129 million, or 40 cents, a year earlier.
The company warned earlier this month that profits would
come in at around 37 cents a share, or 7 cents short of Wall
Street's expectations at the time. It cited "spotty and
unreliable" supplies of microprocessors and motherboards -- the
brains and guts of PCs.
Excluding expenses of $26 million, or 5 cents a share,
recorded for the partnership with America Online and a benefit
from a change in the tax rate, Gateway showed earnings of
$139.3 million, or 42 cents per share.
"Fourth-quarter results were negatively affected by supply
issues and an unexpected slowdown in business-to-business sales
due to Y2K concerns among large businesses and government and
education institutions," Gateway said.
Gateway had only used processors made by Intel Corp.
<INTC.O>. But shortly after its earnings warning, it said it
would turn to Advanced Micro Devices Inc. <AMD.N> for some of
its supplies.
Gateway Chief Financial Officer John Todd said in an
interview after the earnings announcement that the first
quarter had started off well, and the company expected to meet
Wall Street profit forecasts of 41 cents a share for the
period.
"We are off to a good start. On the business side, we are
saying we're starting off soft and ramping up," Todd said.
"We've had a solid 1999 and were excited looking at 2000."
Shares in Gateway climbed 4, or more than 7 percent, to
60-7/8 in trading on the New York Stock Exchange on Thursday.
The company announced earnings after the close of U.S. markets.
The share price was unchanged in after-hours trading.
In the fourth quarter, computer shipments rose 18.3 percent
(REUTERS) FOCUS-Gateway profit dips as AOL brightens outlook
FOCUS-Gateway profit dips as AOL brightens outlook
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