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PC mail-order stores like Gateway are essentially doing business on
razor-thin margins. These last only for a very little while. Also, a
lot is riding on the CEO and President's committment to where they want the
company headed. They've after all, may have gotten a huge check for their
efforts so far when they went public. Now what?
A good indicator is how they position themselves after the initial success
and which markets they want to go after and whether they can succeed there.
Dell is a good example of somebody who's thinking five, ten years ahead.
If you've noticed recently they've diversified into business, education
and server markets. They are making big headways in addressing service
needs of mostly business customers.
I don't see Gateway doing these kinds of things as strongly as Dell.
I would buy my PC from Gateway but would not invest in it!
Nari
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| I agree with .3. Stay away from the "Highly Competitive" PC market
place where you have the next upcoming vendor beat the current "King".
Compaq beat IBM, Dell beat Compaq, Gateway is beating Dell etc etc etc.
The sequence above is only for illustration purpose (it is more complex
than that and many more names in between).
KP
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| From: clarinews@clarinet.com (UPI)
Newsgroups: clari.biz.finance.earnings,clari.tw.computers,clari.biz.products
Subject: Gateway 2000 issues bullish outlook
Date: Mon, 31 Jan 94 17:12:07 PST
NORTH SIOUX CITY, S.D. (UPI) -- Gateway 2000 said Monday it expects to
show record sales and record earnings for its fourth quarter.
The personal computer producer, in an announcement made after the
stock market closed, said fourth quarter sales were expected to be in
excess of $545 million, compared with $354 million in the fourth quarter
of 1992.
Gateway 2000, the leading mail-order marketer of personal computers
in the United States, said earnings would be between $30 million, or 41
cents a share, and $31.5 million, or 43 cents a share, in the 1992
quarter.
Third-quarter revenues were $400 million and nine-month sales of $1.
19 billion. It said 1993 revenues were expected to surpass $1.73 billion
on the sale of approximately 692,000 units.
Ted Waitt, chairman and chief executive officer, said the revenue
growth was due to strong demand for products running on Intel Corp.'s
Pentium microprocessor, multimedia PCs and its line of portable PCs.
``Sales of portable PCs grew significantly from the third quarter,''
he said. ``We also saw strong momentum for our multimedia and Pentium
products in the fourth quarter, and we expect that trend to continue.''
Gateway 2000 went public in December with a $160 million intitial
public offering. Analysts have said that the issue was priced
inexpensively at about 10 times projected 1993 earnings.
Gateway 2000 has been highly successful at the direct marketing of
IBM-compatible desktop and portable personal computers through mail
order. By eliminating marketing middlemen, Gateway has been able to
offer attractive prices.
Companies such as Packard Bell, Gateway 2000, AST Research, Dell
Computer Corp. and Northgate have been credited with pioneering the mass
market for personal computers in the United States through such tactics
as direct mail, selling through mass merchandisers rather computer
stores and selling machines with software applications already loaded
in.
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