Computer business Gateway just saw a 44 percent sales drop in the third quarter this year according to reports by the company.  However, the computer business reported a small revenue decline of eight percent in its professional sales units, the first set of earnings for the division managed by the new Gateway CEO Ed Coleman.  

Gateway saw overall a third quarter revenue of $963 million, which was a drop from $1.02 billion for the same period last year.  The company also reported a net income of $18.2 million, taking into account a net tax benefit of $8.2 million.

Gateway spokespeople are noting the drop in direct sales in two areas:  sales from an ISP that had offered Gateway promotions previously but cut this offer; a decrease in extended warranty revenue since the company went for a third-party warranty insurer.

Computer business Gateway’s Professional Sales unit ships products to government and commercial clients and uses solution providers.  This unit saw $263 million in third-quarter revenue.  The Direct Sales unit experienced $75 million in revenue and the retail group received $626 million.

Even though there was a 44 percent direct sales decline, company executives say they will not change the business model, which is currently to ship to retail outlets both directly and through solution providers.

According to experts, computer business Gateway is the Number 3 U.S. PC maker and enjoys a six percent market share.  

Blogged By:  Computer Consulting 101 Professional Kit