is having a forgettable year.
Plant closings, job cuts, lowered financial targets and a price war have all been part of the PC maker's story in 2001. On Thursday, the company said it expects to lose 14 cents to 17 cents a share in the third quarter, excluding charges. A loss in that range would be considerably wider than analysts are projecting. Wall Street is looking for a loss of 4 cents. Gateway said a drop in demand across all customer segments in the weeks following the Sept. 11 terrorist attacks forced the downward revision.
The company will report its third-quarter results Oct. 18.
In addition, deteriorating market conditions have also lowered thevalue of a number of the company's investments. As a result, Gateway expects to take an additional noncash charge of $100 million to $130 million in the third quarter.
The San Diego company, known for its dairy-cow-themed shipping boxes, certainly isn't the only computer hardware vendor to stumble badly in 2001. Demand across the industry has slowed, and many names in the business have been struggling to convince consumers to keep upgrading their existing products.
Earlier this week,
, which is merging with
, issued a profit warning. H-P has become a serial-warner and has watched its growth rates slow. But this morning,
, the direct seller that has essentially become the industry's standard-bearer, reaffirmed its guidance, an announcement that technology investors cheered, especially because it came the day after networking outfit
stood by quarterly forecasts.
Gateway still expects to return to profitability inthe fourth quarter, on a pretax income basis, excluding special charges. The company forecast that domestic unit sales will increase in the last quarter of the fiscal year. But because of the third-quarter projection, Gateway no longer expects to be profitable, on a pretax income basis, excluding charges, for the second half of 2001.
Shares of Gateway were halted for extended trading, after closing the regular session up 15 cents, or 3.2%, at $4.85. The 52-week high is $57.28, and the stock is just pennies above its low for the year.