GV,
Just when I was feeling like it was a victory that the NASDAQ was down only 30 points. Gateway PR:
Gateway Expects Lower Than Anticipated Fourth Quarter Revenue and Earnings
- Company expects lower revenue and EPS due to significantly slower-than-expected consumer PC demand - Management reduces 2001 estimates - Company announces $200 million charge
SAN DIEGO, Nov. 29 /PRNewswire/ -- As a result of considerably weaker-than-expected consumer holiday sales of personal computers, Gateway, Inc. (NYSE: GTW - news) today announced that it expects to report revenue and earnings per share for the fourth quarter ending December 31 that are significantly lower than Wall Street consensus estimates.
The company said it expects to report revenue of approximately $2.55 billion for the fourth quarter, about equal to the same period the previous year, and $500 million below previous estimates. The company said it expects operating income of at least $0.37 per share, which is $0.25 below analyst consensus estimates.
Gateway also will be taking a one-time charge of approximately $200 million, or $0.39 per share, related primarily to the write-down of the company's investments in technology-based companies and other assets in accordance with generally accepted accounting principles. Including the charge to earnings, Gateway could report a loss of $0.02 for the fourth quarter assuming there is no upside to the adjusted earnings guidance.
In addition, the company said today that it is guiding EPS estimates lower for 2001. The company now expects EPS of $1.89 for the full year 2001, versus previous consensus estimates of $2.28.
``We expect consumer sales to continue ramping up this quarter, but it is now obvious to us following the Thanksgiving weekend that they will not grow sufficiently to allow us to meet previous consensus for EPS and guidance for revenue,'' said John Todd, Gateway chief financial officer. ``The economic slowdown, coupled with on-going shifts in PC seasonality, clearly had a significant impact on our sales over the holiday weekend. We expect these issues will continue to have an effect on overall demand over the next twelve to eighteen months.''
``While our current quarter results are disappointing, we still expect to deliver 25 percent net income growth this year prior to the writeoff, which will be among the best in the industry,'' said Jeff Weitzen, Gateway president and chief executive officer. ``We also believe we have the right strategy, and are executing well against it. We remain confident that we're on the right track and that we will continue to distance ourselves from traditional competitors in 2001. We also believe we are well positioned to benefit from the coming convergence of broadband access, content, communication and devices.''
About Gateway
Gateway (NYSE: GTW - news), a Fortune 250 company founded in 1985, focuses on building lifelong relationships with consumers and businesses through complete technology personalization. Gateway ranked number one in U.S. consumer PC revenue in 1999(1) and was rated among the top ten best corporate reputations in America according to a survey conducted in August of 1999 by Harris Interactive and the Reputation Institute and published in The Wall Street Journal. In 1999, Gateway was seventh in total return to shareholders among Fortune 500 companies and tenth in total shareholder returns over the past five years.(2) Gateway employees worldwide provide clients with services and built-to-order computers that consistently win top awards from leading industry publications. Gateway had total global revenue of $8.65 billion in 1999. For more information, visit our Web site at www.gateway.com
(1) According to GartnerGroup/Dataquest US PC Quarterly statistics.
(2) According to Fortune Magazine, April 17, 2000. |
