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Gateway Posts Q2 $7.7 million Net Loss

Irvine, Calif. — Gateway executives pointed to across the board weakness to explain the company’s $7.7 million loss for its second quarter, ended June 30, even though overall sales rose 5 percent to $919 million.

The second-quarter loss was an improvement, compared with the $12.3 million loss the company experienced during its 2006 first quarter, but during the same period in 2005 Gateway showed a profit of $17.2 million.

Gateway’s chairman and interim CEO Rick Snyder labeled the second-quarter performance “disappointing,” but said strategic changes put into effect during the first quarter are starting to have a positive impact. When these earlier changes are combined with new initiatives in marketing, manufacturing and tech support which are expected to come online during the second half, the company’s performance should improve, he said.

Gateway sold 1.2 million PCs during the quarter, a 16 percent increase compared with the same time last year, but down 15 percent from the first quarter. The year over year increase was due to U.S. market-share gains.