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PC sales fuel Gateway 4Q
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January 21, 1999: 5:50 p.m. ET
Company beats estimates by 3 cents a share on 35% increase in PC sales
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NEW YORK (CNNfn) - Gateway Inc. Thursday reported fourth-quarter earnings ahead of Wall Street estimates as the computer maker posted a 35-percent increase in PC sales.
The North Sioux City, S.D.-based company logged a profit of $129.1 million, or 81 cents a share, on $2.3 billion in sales. Analysts polled by First Call expected Gateway (GTW) to post earnings of 78 cents a share.
Gateway's performance far outstripped last-year's fourth-quarter results, when the company posted earnings of $93 million, or 59 cents a share, on $1.98 billion in revenue.
Much of Gateway's strong performance rested in record sales of 1.15 million PCs during the quarter. For the year, the company totaled 3.5 million unit shipments, a 37-percent jump from 1997's 2.58 million unit shipments.
Gateway's sales were boosted by its Your Ware program, through which customers purchased custom-built PCs direct from the company, and the addition of 59 Gateway Country stores in the fourth quarter. The company now operates 144 Gateway Stores in the United States.
"Our phone, retail and web channels all performed well and, even more importantly, in harmony, giving customers a superior buying experience," said Jeff Weitzen, Gateway president and chief operating officer.
Gateway's gross profit margins grew to 21.6 percent, compared with 18 percent a year ago and 20.8 percent in the third quarter. The company's margins grew despite a drop in the average price per computer, which fell to $2,003 from $2,326 in last-year's fourth quarter.
For the 1998 fiscal year, Gateway logged earnings of $346.4 million, or $2.18 per share, on revenue of $7.47 billion, compared with a 1997 profit of $109.8 million, or 70 cents per share, on $6.29 billion in revenue.
Gateway shares slipped 1/2 to close at 58 in Thursday trade. 
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Gateway
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