Gateway 2000 has issued a profit warning for its third quarter to the end of September, blaming over bullish forecasts and the US strike of carrier firm UPS.
Ted Waitt, chairman and chief executive of the company, admitted that his company had been over optimistic about sales. ?Basically our internal forecasts were overly aggressive,? he said. ?When you fall short of your internal forecast, two things happen: costs go up as a percentage of sales and margins go down.?
That meant, the company said, that operating income will fall to ?marginal levels? in the third quarter. This does not take into account non-cash charges associated with Gateway's acquisition of ALR and a write-off of ?certain investments in information systems?.
Waitt also blamed the US strike at UPS for adversely hitting sales. The company uses the courier for around 50 per cent of its direct shipments in the US.
?We are taking the necessary actions to get our business back on track and we are looking forward to an exciting Q4,? Waitt said.
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