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Gateway reports Q2 earnings of £80 million

Direct vendor rakes it in

Fuelled by continued strong sales of PCs to consumers, Gateway has announced profits of £80 million for the second quarter, topping analyst estimates.

Profit is up 36 percent compared to the same period a year ago on revenue increases of 12 percent.

Gateway sold 1.2 million units in the second quarter (up the end of June), compared to 1 million a year ago equivalent to an increase of 17 percent.

The company's consumer division experienced a 32 percent rise in revenue and a 39 percent increase in units.

Gateway attributed the solid shipment growth to better availability of midrange microprocessors, motherboards and DRAM (dynamic random access memory).

The company historically has a stronger second half of the year financially - as do other PC makers -because of back-to-school and holiday sales.

The company expects this year to follow that same track and intends to start offering its first Internet appliances that are being co-developed with AOL. The first device will be for kitchen worktops and will hit UK shelves this year.

Despite the positive second quarter and the outlook for the rest of the year, Gateway officials apparently aren't entirely pleased. The company hasn't achieved its full potential when it comes to the business-to-business market and must aim to improve in that area, according to a Gateway statement outlining the quarterly financial report.

Gateway's solid quarterly showing is an indication that other vendors due to release earnings statements next week also will post strong gains. Computer vendors Apple and IBM, which vie with Gateway for market share, will release reports next week, as will rival chip makers Intel and AMD.

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