Direct seller Gateway 2000 reported a loss for its third quarter but blamed the abandonment of an unspecified software project and its acquisition of ALR for part of its problems.
Said Ted Waitt, CEO of Gateway 2000: "We continue to gain market share but our growth in the quarter was not what we expected."
The company turned in sales of $1.5 billion, compared to $1.2 billion in the same quarter last year, while its net loss this year was $107 million compared to a profit of $60.7 million last year.
The software project accounted for $45.2 million and is a non-recurring charge, while the company also had to find $8.6 million in redundancy payments, as previously reported on Newswire.
Waitt said that aside from the non-recurring charges, Gateway had a problem with excess stock, with components declining sharply in market value. Sales and administrative costs increased to $219.3 million, which represented 14 per cent of turnover.
Waitt said that the UPS strike earlier in the year had also had a bad impact on its ability to deliver PCs to its customers.
Sales in the Americas grew by 31 per cent, in Europe 5 per cent in Asia Pacific by 41 per cent, year on year.
Meanwhile, sales of portable products also grew by 66.5 per cent in the quarter, and represented 12 per cent of its total sales.
But despite the losses, Waitt was upbeat about the company.
He said: "We took the steps we needed to take in the third quarter to position our company for future growth and...we're now seeing typical fourth quarter demand."
He claimed that without the non-recurring charges and the problem with components falling in value, Gateway would have made "marginal income" during the quarter.
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