Gateway going from bad to worse with profit warning

NEWS Despite desperate efforts to turn around its flagging business PC seller Gateway has warned that its fourth-quarter sales fell short of its already lowered estimates and said it would post a greater-than-anticipated loss for the quarter. Gateway said it now expects to report fourth-quarter revenue of approximately $1.06bn and a net loss of approximately 18 or 19 cents per share. The company had originally forecast a loss of 10 to 13 cents per share, but CEO Ted Waitt said in December that Gateway would need a best-case scenario to reach even the low end of that prediction. Waitt said in a statement: "We experienced demand softness early in the quarter, which we partially offset with aggressive promotions in December. While our quarterly unit volume pace gained velocity at the end of the quarter, the need to invest in spurring that demand through promotions significantly increased margin pressure." Additionally, Gateway warned that it is "currently evaluating" a dispute with a major partner that could lead the company to post an additional net loss of up to three cents per share for the quarter. In a conference call with analysts, Waitt declined to offer further details on the partner dispute or to name the partner in question. Gateway will post full results on 29 January. Ian Fried writes for News.com