SAN FRANCISCO (AFX) -- Gateway Inc. on Thursday reported a first-quarter quarter loss that more than doubled over a year ago as the No. 3 U.S. personal-computer company incurred $14 million in litigation costs even as revenue rose.
Gateway said it lost $12.3 million, or 3 cents a share, compared with a loss of $5.2 million, or a penny a share, a year ago. Revenue rose 29% to $1.08 billion from $838 million.
Gateway interim Chief Executive Rick Snyder said that excluding $14 million in litigation charges the company 'essentially broke even' during the quarter. Analysts surveyed by Thomson First Call had forecast Gateway would earn 2 cents a share on $942 million in revenue.
Chief Financial Officer John Goldsberry said the litigation charges stemmed from settling a suit in Utah.
Snyder, who took over as interim CEO from Wayne Inouye on Feb. 9, said that while Gateway's retail sales continued to do well, the company's results were partially offset by losses in its professional services unit, an area that Gateway has pledged to build up this year.
'Retail made up about 70% of our revenue, and we're very pleased with that,' Snyder said. 'But we're not happy with the professional segment and we're working to address that.'
The company said it sold 1.38 million PCs during the quarter, a 47% increase over a year ago. Retail sales made up $767 million of revenue and 1.163 million units sold during the quarter. However, professional segment sales fell 4%, to $202 million, from a year ago.
Gateway adhered to a company policy of not giving earnings or revenue forecast for its second quarter. Analysts estimate the company will earn 3 cents a share on $973 million in revenue.
In after-hours trading, Gateway shares slipped to $2.17, after rising more than 5% in the regular market session. This story was supplied by MarketWatch. For further information see www.marketwatch.com.