Gateway Q1 Revise Cuts Expectations
Staff -- TWICE, 4/16/2001
SAN DIEGO — Looking ahead to first-quarter 2001 financial results, Gateway has reevaluated its stance, now saying it expects to break even on an operating income basis, before the impact of non-recurring charges. This falls well below a 17-cents-per-share profit expectation issued earlier by First Call/Thomson.
The company, which plans to refocus on its core personal computer business in order to turn financial results around, said units sales in the first quarter are expected to be down slightly, compared with the year-ago first quarter, but in line with previous top-line expectations.
Gateway also said it estimates its charge to first-quarter earnings will total between $150 million and $275 million, including the previously announced estimate of $50 million for job elimination and related matters.
The increased charge relates primarily to restructuring Gateway's operations, including the possible closing of under-performing stores, planned modification of or exit from certain international markets and write-down related to IT projects, in addition to the previously announced reduction in force and management departures.
In the rest of 2001, Gateway expects to continue operating the business on a break-even basis through the first half of the year, with a planned return to profitability and unit growth, compared to the previous year, during the second half.
The company said it had revised financial results for the first three quarters of 2000 as well as the year, restating year-end earnings at $74.5 million below what it reported in January.
Net income for the year was $241.5 million, compared with the previously reported $316 million. Sales remained virtually the same at $9.6 billion, down from the previously reported $9.7 billion.
The net loss for the fourth quarter was $128.2 million, down from the previously reported $94.3 million. Net sales for the fourth quarter were $2.45 billion, up from the previously reported $2.37 billion.
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