Gateway Provides Fourth Quarter Update and 2005 Guidance
December 15 2004 - 5:37PM
PR Newswire (US)
Gateway Provides Fourth Quarter Update and 2005 Guidance IRVINE,
Calif., Dec. 15 /PRNewswire-FirstCall/ -- Gateway, Inc. (NYSE:GTW)
today announced that it has updated its fourth quarter revenue
range to $1.0 billion to $1.025 billion, and raised its GAAP
earnings per share estimate from a range of breakeven to a 1 cent
profit, to a range of 22 to 24 cents. The improved GAAP earnings
primarily reflect the 24 cent gain associated with the previously
announced retirement of Series A and C preferred stock, a negative
3 to 4 cent impact due to acceleration of transformation,
integration and restructuring activities, and a 2 cent gain on the
retirement of liability associated with a recent outsourcing of
extended service plans. As a result of the extended service plan
liability retirement mentioned above, the company is raising its
estimated fourth quarter non-GAAP earnings per share before
restructuring, transformation and integration costs from a range of
1 to 2 cents to a range of 3 to 4 cents. The company also indicated
that it expects to end the year with approximately $550 million to
$575 million in cash. (Logo:
http://www.newscom.com/cgi-bin/prnh/20020930/LAM050LOGO) The
company provided full-year 2005 guidance including a revenue range
of approximately $4 billion to $4.25 billion and GAAP earnings per
share of 15 to 17 cents. Non-GAAP earnings per share before
restructuring, transformation and integration costs are expected to
be 17 to 19 cents. While Gateway has not yet provided guidance for
the first quarter of 2005, the Company has historically experienced
a seasonal quarterly decline in revenues in the first quarter as
compared to the fourth quarter, in the range of 10 to 15 percent.
Given the increase in the Company's sales through retail channels,
which are seasonally higher in the fourth quarter, it would expect
revenues in the first quarter to reflect a seasonal decline of 15
percent or greater. Consistent with traditional guidance timing,
Gateway expects to provide guidance for the first quarter in late
January when it reports results for the fourth quarter and full
year 2004. Table A: Reconciliation of Prior to Updated Earnings Per
Share (EPS) Guidance for fourth quarter, 2004. GAAP EPS Operating
EPS Prior Guidance $0.00 -- $0.01 $0.01 -- $0.02 Gain on Series A
and C $0.24 -- Restructuring, Transformation and Integration
($0.03) -- ($0.04) -- Extinguishment of Liability $0.02 $0.02
Updated Guidance $0.22 -- $0.24 $0.03 -- $0.04 About Gateway Since
its founding in 1985, Irvine, Calif.-based Gateway (NYSE:GTW) has
been a technology pioneer, offering award-winning PCs and related
products to consumers, businesses, government agencies and schools.
After acquiring eMachines in early 2004, Gateway is now the third
largest PC company in the U.S. and among the top ten worldwide. The
company's value-based eMachines brand is sold exclusively by
leading retailers worldwide, while the premium Gateway line is
available at major retailers, over the web and phone, and through
its direct sales force. See http://www.gateway.com/ for more
information. Certain non-GAAP financial information This press
release contains certain non-GAAP financial information, including
disclosure of the portion of the company's SG&A, gross margins
and net income relating to, or affected by, certain restructuring
charges, transformation expenses and integration expenses. This
non-GAAP financial information is provided as supplementary
information and is not an alternative to GAAP. This non-GAAP
financial information is used by management and management believes
it is useful to investors to analyze the company's baseline
performance before charges and expenses that are considered by
management to be outside of Gateway's core operating results,
notwithstanding the fact that such restructuring, transformation
and integration expenses may be recurring. This non-GAAP
information is among the primary indicators management uses as a
basis for evaluating Gateway's financial performance as well as for
forecasting of future periods. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for reported results determined in accordance with GAAP.
Special note This press release contains forward-looking statements
that involve risks and uncertainties, as well as assumptions that,
if they do not materialize or prove incorrect, could cause
Gateway's results to differ materially from those expressed or
implied by such forward-looking statements. All statements, other
than statements of historical fact, are statements that could be
forward-looking statements, including any projections or
preliminary estimates of earnings, revenues, or other financial
items; any statements of plans, strategies and objectives of
management for future operations; the extent of seasonal changes in
demand; any statements regarding proposed new products, services or
developments; any statements regarding future economic conditions
or performance; statements of belief and any statement of
assumptions underlying any of the foregoing. The risks that
contribute to the uncertain nature of these statements include,
among others, risks related to shifting our distribution model to
third-party retail; competitive factors and pricing pressures,
including the impact of aggressive pricing cuts by larger
competitors; general conditions in the personal computing industry,
including changes in overall demand and average selling prices,
shifts from desktops to mobile computing products and information
appliances and the impact of new microprocessors and operating
software; the ability to simplify the company's business, change
its distribution model and restructure its operations and cost
structure; component supply shortages; short product cycles; the
ability to access new technology; infrastructure requirements;
risks of international business; foreign currency fluctuations;
risks relating to new or acquired businesses, joint ventures and
strategic alliances; risks related to financing customer orders;
changes in accounting rules; the impact of litigation and
government regulation generally; inventory risks due to shifts in
market demand; the impact of employee reductions and management
changes and additions; and general economic conditions, and other
risks described from time to time in Gateway's Securities and
Exchange Commission periodic reports and filings. Gateway assumes
no obligation to update any forward-looking statements to reflect
events that occur or circumstances that exist after the date on
which they were made.
http://www.newscom.com/cgi-bin/prnh/20020930/LAM050LOGO
http://photoarchive.ap.org/ DATASOURCE: Gateway, Inc. CONTACT:
media, Lisa Emard, +1-949-471-7705, , or investors, Marlys Johnson,
+1-605-232-2709, , both of Gateway, Inc. Web site:
http://www.gateway.com/
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