Gateways Outlook Still Grim

Gateway Inc. chairman Ted Waitt has warned that the struggling PC maker's revenue outlook is even more dour than previously projected

Gateway Inc. chairman Ted Waitt, who last month reclaimed the title of CEO following Jeffrey Weitzens departure, has warned that the struggling PC makers revenue outlook is even more dour than previously projected.

Hard hit by an industrywide slump in PC sales that spurred the company to cut 12 percent of its work force last month, Gateway is projecting a first-quarter loss, its second consecutive losing quarter, and warned that earnings and revenue for the first half of the year will fall 50 percent below previous estimates.

Waitt told a gathering of financial analysts Feb. 28 that he will focus on boosting Gateways PC business by streamlining its product offerings and emphasizing customer service. The strategy marks a reversal of the companys recent focus on "beyond-the-box" revenues, comprising sales of peripherals, software and services.

Last week, research company Harris Interactive Inc., of Rochester, N.Y., reported that Gateway was the No. 1 brand among first-time home PC buyers and was second only to Apple Computer Inc. in customer loyalty based on repurchase rates.

"Two years ago, I thought that they were beginning to slip, but this year, I have experienced nothing but success," said Curt Fuchs, director of media services for the Columbia Public School District, in Columbia, Mo.

Fuchs said that while he experienced delays last year in dealing with the company due to restructuring within Gateway, those issues have been resolved. He said hes been "very pleased" with the quality of the estimated 1,700 PCs hes bought in the past year.

Waitt also announced that the company will scrap plans to open 90 more Gateway Country retail stores this year and may eliminate its kiosks in OfficeMax Inc. retail stores.