Gateway Updates Shareholders on Fourth Quarter 2001 Performance
Company Expects to Return to Profitability and Exceed Analysts' EPS Consensus
Shipped Approximately 700,000 Units
Exits Quarter with $1.1 Billion in Cash and Zero Long Term Debt
POWAY, Calif., Jan. 7 /PRNewswire/ -- Based on preliminary results from
the fourth quarter of 2001, Gateway, Inc. (NYSE: GTW) today reaffirmed
previous guidance that it expects to return to profitability for the quarter
on a pre-tax income basis, excluding special charges. Consensus estimate for
the fourth quarter is a loss of $.01 per share. The company also said it
experienced a 15% sequential decline in domestic unit sales from the third to
fourth quarters.
The company expects to report revenue of approximately $1.16 billion for
the quarter when it announces its fourth quarter and full year 2001 results on
its regular conference call on January 24, 2002. At that time, Gateway will
provide shareholders with finalized results for the quarter, including greater
detail of its results of operations, as well as guidance for 2002.
The company said today that it generated a higher than expected average
unit price of approximately $1,660 in the fourth quarter based on a
combination of the continued development of the company's technology solutions
business as well as a richer system mix in PC sales. This, coupled with
aggressive cost containment efforts, contributed to the company's expected
return to profitability.
"Our fourth quarter performance shows we're making solid progress on our
strategy of delivering integrated technology solutions," said Ted Waitt,
Chairman and CEO. "It's clear that a significant portion of market demand was
at the very low end of the PC market in the fourth quarter, driven largely by
aggressive pricing and promotions. We stayed focused on our strategy and
targeted higher-end customers during the holiday selling season, which allowed
us to meet our previous guidance of returning to profitability, our primary
goal.
"Going forward, we intend to continue to focus on cost containment and
efficiency while advancing our strategy through strong execution and
profitable growth among our target markets."
Finally, Gateway expects to report continued strength in liquidity,
exiting the fourth quarter with no long term debt and more than $1.1 billion
in cash and marketable securities, up from $936 million at the end of the
third quarter. |
