Gateway on Thursday reported an $81 million operating loss for the first quarter, most of it due to losses from its business of financing consumers' computer purchases.
Excluding special charges and $75 million in losses related to its loans to consumers, the company reported a pre-tax loss of $6 million. This translates into an after-tax loss of about a penny a share, Gateway Chief Financial Officer Joe Burke said. Its revenue of $2.03 billion was roughly in line with analyst expectations.
Analysts were predicting a loss of a penny a share, according to First Call.
The company previously said it would break even for the first two quarters of the year.
In an interview, Burke said, the company still expects to report break-even results for the first half of the year.
Gateway's losses came in a quarter that saw the return of founder Ted Waitt as CEO, a nearly wholesale change in the company's management and the slashing of 3,000 jobs.
"We think we are going to be at break-even for the first half, returning to profitability in the second half of the year," Burke said.
Burke also said that Gateway believes most of its job cuts and closings of its Gateway Country stores are behind it.
"I think we've basically announced all of the store closings we're going to have," Burke said.
Including the special charges and loan-related losses, Gateway lost $503 million, or $1.56 per share, in the first quarter. Gateway's charges included $75 million for the closing of underperforming stores in the United States and Canada, as well as $100 million to write down its consumer-loan portfolio to the amount it actually expects to bring in.
More details to follow.>