GTW misses, warns, takes enormous charge (probably be up 20% tomorrow..."bad news is out"):
quote.bloomberg.com
04/19 17:45
Gateway's 1st-Qtr Loss From Operations Is 1 Cent
(Update4)
By Peter J. Brennan
San Diego, April 19 (Bloomberg) -- Gateway Inc., the second- biggest
direct-seller of personal computers, said it had a first- quarter loss because of
falling sales and charges for bad loans, an acquisition and to close stores.
The loss from operations was $6 million, or 1 cent a share, compared with net
income of $119.6 million, or 36 cents, in the year-earlier period, Chief Financial
Officer Joe Burke said. The result met the average estimate of analysts surveyed
by First Call/Thomson Financial. Sales fell 15 percent to $2.03 billion.
Gateway founder Ted Waitt returned as chief executive Jan. 29 after one year,
firing CEO Jeff Weitzen. The company reduced its profit estimate in February to
break-even and said it would return to profitability in the second half. Other PC
makers such as Dell Computer Corp. and Compaq Computer Corp. also have
said they expect first-quarter earnings lagged year-earlier results.
Gateway had a pretax charge of $533 million that included writeoffs for bad loans,
the $140 million acquisition of NECX Direct and $75 million to close stores.
Burke didn't provide an after-tax result. The company also had an after-tax charge
of $24 million from implementing new accounting rules.
The charges made a loss of $502.9 million, or $1.56 a share. The company had
no charges or gains in the year-earlier quarter.
Shares of San Diego-based Gateway rose 72 cents, or 4.2 percent, to $18.02 in
regular U.S. trading. They fell as much as $1.02, or 5.7 percent, to $17 in
after-hours trading. Dell is the biggest direct-seller of PCs.
(Gateway began a conference call at 5:30 p.m. New York time to discuss its
results. To listen, go to gateway.com.) |
