Gateway sees higher Q2 revenue on improved sales

Gateway expects to report higher-than-expected revenue in its first full quarter since it bought eMachines.

Gateway expects to report higher-than-expected revenue in its first full quarter since it bought eMachines.

The company cited improved sales among professional and retail customers as the reason for the improved revenue outlook.

Gateway now expects to record between $860m (£471m) and $880m in the second quarter. Gateway's previous forecast for the second quarter, which also took into account the added revenue from eMachines, was $798m.

Marked increases in corporate spending have been noted by PC industry leaders Dell and Hewlett-Packard, as well as chip maker Intel in the first half of this year, which is usually a slow period for PC sales.

Gateway's improvement in retail sales is largely due to the integration of eMachines' PCs into its product line-up. Just prior to the acquisition, eMachines had started to offer low-cost desktops and notebooks based on Intel and Advanced Micro Devices processors.

EMachines sells its products through retailers such as Best Buy and Circuit City Stores. The acquisition made Gateway's own network of retail stores redundant, leading to the close of 188 Gateway stores in April.

Despite the improvement in revenue, Gateway still expects to post a significant net loss after it pays for its latest round of restructuring costs.

The company laid off 4,000 workers in the second quarter in a bid to cut costs. The restructuring costs could reach $300m in the second quarter, Gateway said.

Tom Krazit writes for IDG News Service

Read more on PC hardware

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close