Gateway Inc. reported preliminarily revenue of $868 million for the first quarter ending March 31, compared with $844 million in the prior year period.
The company preliminarily recorded a first-quarter net loss of $166 million, or 49 cents per share. The company’s first-quarter financials include the operations of eMachines, Inc., which Gateway’s acquired as of March 12. Gateway’s final results for the quarter will be released by May 10.
Gateway closed its 188 retail stores on April 9, and is negotiating with electronics and PC retailers to expand the retail availability of the company’s products. The closure of the retail stores is expected to negatively impact future revenue by approximately $300 million per quarter and to reduce expenses by approximately $60 million per quarter. As part of its restructuring, the company expects to reduce its overall employee base to about 2,000 people, compared with approximately 3,500 following the store closures.
The company plans to promote the eMachines PCs as a value brand and Gateway PCs as a premium brand. Gateway consumer electronics products will be positioned as a premium alternative to lower cost brands.
In the consumer segment, revenue was $524 million, including sales of 388,000 PCs, an eight percent increase over the prior year period. In the professional segment, revenue was $344 million, with PC unit sales of 216,000, a 10% decline over the same period in 2003.
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