-- Gateway <GTW.N> comfortable with Q2 EPS =3 --
McKittrick declined to say what percentage of the company's
revenue is derived from business with large corporations, but
that sales to customers other than consumers and small
businesses make up about half its revenues.
First quarter revenues were $1.73 billion.
Gateway told investors at the conference that its recently
introduced sales program called "YourWare," which includes
Internet access and financing options, is the computer
company's answer to the sub-$1,000 personal computer market,
where it sees little opportunity.
-- Gateway <GTW.N> comfortable with Q2 EPS =4 --
"We think this is a vastly superior alternative to what is
described as the sub-$1,000 PC," McKittrick told the group. "I
don't know anybody that's making money in that market today."
He said program addresses two problems: financing and
obsolescence. Buyers using the YourWare program can not only
finance the purchase, but can trade in their PC in two years
for a new one.
In addition, McKittrick said the program has the potential
to double Gateway's gross margin dollar per system sale. A
straight sale of its bottom-line PC at $1,249 has a gross
margin dollars of about $200 but through a YourWare sale, that
could reach more than $400, he said.
The North Sioux City, S.D.-based company plans to have 300
to 400 of its Country Store retail outlets operating in the
next two to three years, he added.
About 50 are currently operating and McKittrick said all
are performing better than expected.
Shares of the company, which is the third largest PC
company according to research firm International Data Corp,
were down 1-3/4 at 49-5/16 in afternoon activity on the New
York Stock Exchange.
((Chicago equities news, 312 408 8787,
chicago.equities.newsroom@reuters.com))
REUTERS |
