Feeds

Gateway loss widens as patent lawsuit fund grows

Deal with HP in the offing?

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

Legal costs knocked a further $6m off Gateway's bottom line, widening its Q1 loss to $172m (51 cents a share), the PC maker announced today.

The company stuck with the preliminary revenue figure it put out at the end of April. It made $868m in the three months to 31 March 2004, less than percentage point down on the $875m it reported for Q4 2003 and up on the $844m it posted this time last year.

Gateway was expecting to announce a $166m loss for the quarter, during which it acquired budget PC maker eMachines. That figure included a $104m one-off restructuring charge revolving on the eMachines acquisition and Gateway's plan to close its 188 bricks'n'mortar stores with the loss of 2500 jobs. Early in March, it announced the loss of another 2000 jobs.

The $6m addition to the preliminary quarterly loss is due to "an increase in a reserve related to a patent-infringement claim as a result of recent developments in final settlement negotiations".

Currently, Gateway is being sued by HP, which claims six of its PC-related patents have been violated by its rival. HP began legal proceedings against Gateway last March after the latter allegedly refused to renew a technology license it had signed with Compaq but which expired in 1999. HP acquired Compaq in 2002.

That reference from Gateway to "final settlement negotiations" suggests it is paving the way to cough up cash to HP to end the affair. Clearly it wants it take some of that on the chin now rather than handle it in a future quarter. A more cynical observer than us might suggest that the release of preliminary figures followed by a quick addendum a few weeks later might be seen as a way of disguising the bad news. ®

Related stories

Gateway axes 2500 jobs, closes US stores
Gateway waves goodbye to another 2000
Gateway to buy eMachines
HP sues Gateway over patents

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple's iPhone 6 first-day sales are MEANINGLESS, mutters analyst
Big weekend queues only represent fruity firm's supply
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Bill Gates, drugs and the internet: Top 10 Larry Ellison quotes
'I certainly never expected to become rich ... this is surreal'
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
EMC, HP blockbuster 'merger' shocker comes a cropper
Stand down, FTC... you can put your feet up for a bit
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.