Gateway joins others in downsizing forecast

Gateway added to Wall Street's high-tech stock blues by announcing it is now predicting lower sales and earnings in this crucial fourth quarter. The new sales target of $2.55 billion is $500 million below previous estimates. Profits will be down around $37 cents per share from earlier forecasts of $62 cents. Add to that a $200 million charge to write-down the value of some of the company's investments in technology-based companies and the Wall Street investors sold out of their Gateway holdings to the tune of a 30 per cent one-day drop to $21.50

The Gateway announcement came after the Stock Market closed in New York. The stock took an immediate dump in online after-market trading and dragged down other high-tech stocks, such as Intel, which dropped nearly 10 per cent to $39.25.

"We expect consumer sales to continue ramping up this quarter, but it is now obvious to us following the Thanksgiving weekend that they will not grow sufficiently to allow us to meet previous consensus for EPS and guidance for revenue," said Gateway Chief Financial Officer John Todd. "The economic slowdown, coupled with ongoing shifts in PC seasonality, clearly had a significant impact on our sales over the holiday weekend," Todd said. Todd said the slowdown in PC sales will continue into 2001. "We expect

these issues will continue to have an effect on overall demand over the next 12 to 18 months."