Gateway Expects Wider Loss

Gateway Inc., the second-biggest direct seller of personal computers, said it will have a much wider loss in the first quarter as it cuts prices to gain market share.

The company expects to report a loss of $100 million to $120 million, or 18 cents a share to 24 cents a share, Chief Financial Officer Joe Burke told analysts at a meeting in San Diego. Analysts were expecting a loss of 7 cents, on average, according to Thomson Financial/First Call.

Revenue should come in at about $1 billion, the Poway, Calif.-based company said, missing analysts’ expectations of $1.06 billion.

Gateway has said it expects pretax losses for several quarters as it tries to reclaim market share with reduced prices and to increase the more profitable sales of services. The company said it now expects to return to profitability in fiscal 2003.

For the full year, Gateway said it expects a loss of 39 cents to 49 cents a share, compared with the 16-cent loss analysts forecast, with revenue within earlier expectations at $4.5 billion to $5 billion.

Shares of Gateway fell 33 cents, or 6%, to $5.10 on the New York Stock Exchange, before the forecast was announced.