Gateway Pushes Profit Estimate Out to 2003

Saying it will trade near-term profitability for market share, Gateway ( GTW) warned of a wider-than-expected loss in the first quarter and said it wouldn't earn money before 2003.

The shares were quoted down 35 cents, or 7%, at $4.75 in premarket Instinet trading.

The computer seller expects to lose 18 cents to 24 cents a share in the first quarter on $1 billion in revenue. Analysts on average had been predicting a loss of 8 cents a share. The company expects a pretax loss between $200 million and $250 million, or 39 cents to 49 cents, for the full year, with revenue in the range of $4.5 billion to $5 billion. Analysts were predicting a 17-cent loss. In its fiscal 2003, Gateway said it expects to report a profit before special charges.

Gateway said it is "completely focused on growth in both its core PC and solutions businesses through a combination of aggressive pricing, stepped-up marketing communications and ongoing market development."

The company said its liquidity is "strong" and expects to end 2002 with more than $1 billion in cash and marketable securities.

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