Feeds

Creative profits down despite strong sales

Looks to high-end products to boost its fortunes

Secure remote control for conventional and virtual desktops

Creative experienced a dip in profitability during the final three months of 2005, the second quarter of its 2006 fiscal year, despite big sales gains pushing revenues to their highest level in five years.

Revenue for the period totalled $390.8m, up 4.2 per cent from Q2 FY2005's $375.1m and 39.5 per cent on the previous quarter's $280.2m. Net income was $8.2m (ten cents a share) down from the year-ago quarter's $11.8m and up on Q1 FY2006's $700,000 (one cent a share).

Q2 FY2006's income was boosted by a $6.9m investment gain. So too was the previous quarter, to the tune of $10m. Q2 FY2005's net income was hit by an aggregate impairment of $13.7m, according to Creative today, as a $65.2m cost relating to the acquisition of 3DLabs wasn't fully compensated for by an $51.5m investment gain.

Creative said it reduced its inventory 18 per cent over the previous quarter's level and pledged to continue lowering it during the current quarter. Creative ran into trouble during the three months to 30 June 2005 after sales failed to match the company's forecasts, leaving it with stacks of unsold product and plunging the firm into the red.

Six months on, Creative's president, Craig McHugh, said the company was focusing its efforts more on higher-margin business - primarily its high-end MP3 players and audio products - and working to reduce operating expenses, though he didn't detail how. ®

Related reviews

Creative Vision:M
iRiver U10
Creative Zen Vision personal video player
iRiver T30 1GB digital music player
Apple iPod Nano

Beginner's guide to SSL certificates

More from The Register

next story
Xperia Z3: Crikey, Sony – ANOTHER flagship phondleslab?
The Fourth Amendment... and it IS better
Don't wait for that big iPad, order a NEXUS 9 instead, industry little bird says
Google said to debut next big slab, Android L ahead of Apple event
Microsoft to enter the STRUGGLE of the HUMAN WRIST
It's not just a thumb war, it's total digit war
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Netscape Navigator - the browser that started it all - turns 20
It was 20 years ago today, Marc Andreeesen taught the band to play
A drone of one's own: Reg buyers' guide for UAV fanciers
Hardware: Check. Software: Huh? Licence: Licence...?
The Apple launch AS IT HAPPENED: Totally SERIOUS coverage, not for haters
Fandroids, Windows Phone fringe-oids – you wouldn't understand
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.