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Stock Analyst Update

Gateway Earnings Meet Revised Estimates

Despite chip shortages, the firm's earnings met revised estimates.

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Gateway (GTW) is an example of a solid company that ran into problems at the worst time possible.

Although Gateway reported earnings far below original Wall Street expectations Thursday night, the results were no shock. About two weeks ago, the company warned investors that it experienced severe shortages of PC microprocessors during the holiday season, which is the most pivotal time of the year for many PC makers. Since the shortage became an issue, Gateway has alleviated the threat of future problems by adding AMD (AMD) to its roster of chip suppliers. Moreover, the company's earnings release on Thursday yielded no new surprises, as profits were on target with revised estimates.

Jeremy Lopez does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.