Gateway reported a loss of $72.6 million, or 22 cents a share, compared to a loss of $61.3 million, or 19 cents a share, the same period last year. Revenue tumbled 20 percent to $799.7 million from $1 billion, extending a brutal slide that began in 2001.

The Poway, Calif., company projected its third-quarter loss would widen to 19 cents a share from 15 cents last year but that its fourth-quarter loss would narrow to 9 cents a share from 19 cents. Both estimates were better than analysts' expectations.

The latest quarterly loss beat Wall Street's expectations by six cents a share, according to a survey of analysts surveyed by Thomson First Call.

When trading closed on the New York Stock Exchange, before the results were released, Gateway shares were down 2.9 percent, or 20 cents, to $3.68. They rose 12 cents in extended trading.

Ted Waitt, Gateway's chairman and chief executive, said spending cuts were improving the company's finances. Gateway has closed 80 stores this year and shed 1,900 of its 11,500 employees.

"We have a lot of work to do, but every step in our transformation is being taken from a position of increased strength and momentum," he said.

Gateway said it sold 490,000 PCs during the quarter, down 25 percent from last year. It cited store closures and a move toward higher-end models.

As its PC fortunes sag, Gateway is introducing 50 new products this year, including 12 to 15 televisions, digital cameras, camcorders and DVD players. It entered the TV business last year with a 42-inch plasma model that was priced well below competitors.