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Gateway issues warning
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September 3, 1997: 10:15 a.m. ET
PC direct marketer says third-quarter earnings will "fall short" of estimates
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NEW YORK (CNNfn) - Gateway 2000 will not meet analysts' expectations for third-quarter earnings due to a recent acquisition and the effects of the UPS strike, the computer direct marketer said Wednesday,
The company's admission that its third quarter, ending Sept. 30, will be below analysts' expectations of 47 cents per share was widely rumored on Wall Street, sending its shares downward Tuesday.
In early morning Wednesday trading, Gateway (GTW) was down 2-7/8 to 33-11/16.
"Basically, our internal forecasts were overly aggressive," said Gateway CEO Ted Waitt. "When you fall short of your internal forecast, two things happen: costs go up as a percentage of sales and margins go down."
Gateway said its operating income will be down to marginal levels in the third quarter due to its recent acquisition of ALR.
It also blamed the recent United Parcel Service strike for dragging down deliveries.
Waitt said that unit shipments during the third quarter will still be up 30 percent from the same period last year, but added "clearly, we were looking to do better than that." 
-- Randy Schultz
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Gateway 2000
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