PC direct marketer Gateway Inc posted fourth-quarter results that topped Wall Street estimates as a surge in unit shipments led quarterly revenues over $2bn for the first time in the company’s history. Net income for the quarter rose 39% to $129.1m on revenue up 16.6% at $2.31bn. Earnings per share, up 37.3% at $0.81, edged out the First Call consensus by $0.03. The company says it shipped 1.2 million units in the quarter, up 35% year- over-year, allowing it to achieve its 32nd consecutive quarter of new highs in market share. Average unit prices decreased 14% to $2,003 in the quarter from $2,326 last year and also slipped 2% from the third quarter. But Gateway still managed to improve gross margins for the fifth consecutive quarter, hitting 21.6% compared with 18% last year and 20.8% in the third quarter. The company says it managed this feat due to continued declines in component costs, a wider product mix, and more effective pricing management. Geographically, the Americas region grew 34.5% in units and 15.9% in revenue over the year-ago quarter. Europe saw a 20.9% increase in units and a 1.6% increase in revenue, while Asia Pacific increased 73.9% in units and 50.6% in revenues. Operating income for the quarter was $188m, up from $140m a year ago, while other income doubled to $14m. For the full year, net income rose to $346.4m from $109.8m on revenue up 18.7% at $7.47bn. Earnings per share rose from $0.70 to $2.18, but results for the corresponding period last year include a one-time charge of $113.8m. Unit shipments for the year ended rose 37% to 3.54 million units from 2.58 million units in 1997. The company claims it ended the year with a 9.6% share of the total US market. Looking ahead, the company hopes to rapidly expand its internet business. á
