Gateway Reports Quarterly Loss On Lower Sales

Still, Gateway sales of $992 million were half their year-ago level of $2 billion, though they surpassed expected revenues of $978 million as it sold 645,000 units in the quarter. The drop was caused by the firm's elimination of its international sales operations, store closures and the cutting of some product lines, company officials said.

Gateway, the nation's fourth-largest computer maker, said it lost $126.2 million, or 39 cents a share, for the three months ending March 31. That included $99 million in special charges and compares with a loss of $502 million, or $1.56 a share in the year-earlier period.

Excluding those charges, the company lost $61 million or, or 20 cents a share, meeting expectations of analysts surveyed by Thomson Financial/First Call.

The company, which cut prices and increased marketing in the first quarter, sold 5 percent fewer computers than in the fourth-quarter of 2001.

But chief financial officer Joe Burke said that was actually good news since Gateway and other computer manufactures usually see a decline of 10 percent or more between the fourth and first quarters.

The company, based in the San Diego suburb of Poway, typically sees sales fall about 7 percent between the first and second quarters, but this year Gateway expects revenues to remain flat because of its marketing efforts, Burke said. 'We're feeling very positive,' he said.

Shares of Gateway rose 28 cents to $6.48 in morning trading Friday on the New York Stock Exchange.

The company, which closed 19 of its Gateway Country stores in the first quarter, now has 277 outlets. There are no immediate plans to for 'major' additional closures or layoffs, Burke said.

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