Gateway Reduces 2000, 2001 Sales Associated With AOL

Personal computer maker Gateway Inc. said Tuesday that it is restating its revenue for 2000 and part of 2001 in the wake of a Securities and Exchange Commission investigation into its accounting.

The No. 3 PC maker said combined revenue for 2000 and 2001 was reduced by about $470 million to $15.21 billion because of an accounting review for computers sold with pre-installed America Online software.

“The revision is related to how the company accounted for bundled AOL Internet services, which it previously had reported on a gross basis,” the Poway, Calif.-based company said. “Current management has determined that it is more appropriate to present such amounts on a net basis.”

The restatement “has no bearing on 2002, just on 2000 and the first quarter of 2001,” Gateway spokesman Robert Sherbin said. “It has no bearing on profit or [earnings], but rather on revenue and cost of goods sold.”

The accounting review has forced Gateway to delay by 15 days the filing of its annual financial report, which was due Monday at the SEC but will now be filed by April 15.

Gateway lost $309 million last year in tight pricing competition with Dell Computer Corp. and Hewlett-Packard Co., the two largest PC makers. In March, Gateway said it will eliminate 1,900 jobs and close 80 retail stores. Company officials said they will take an $80-million restructuring charge this quarter, but will cut costs by $400 million during 2003.

Gateway shares fell 13 cents to $2.23 Tuesday on the New York Stock Exchange.