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Creative's Woes Continue
Tuesday, May 2nd, 2006 at 12:00 PM - by Staff
Creative will likely announce a net loss of about US$90 million for the last quarter when it releases its earnings tomorrow, and the company is expected to continue to struggle for the rest of the year. It's Apple's biggest competitor in the digital music player space, but it is currently dealing with excess inventory and tough price competition, according to a Reuters story.
Reporter Jennifer Tan quoted CIMB-GK Securities analyst Jonathan Ng as saying: "We expect the business environment for Creative to remain tough at least for the next two quarters. Demand is only expected to pick up for the year-end Christmas sales. We remain negative on its prospects given the harsh competition in the market and a lack of new winning products in the foreseeable future."
A Reuters poll of analysts shows that Creative is expected to post a loss of around $43.4 million for the current fiscal year, which concludes June 30. A year ago, the company posted a $1.1 million profit, and in the December quarter it was $1.3 million in the black. However, the March quarter was plagued by restructuring charges well as lower flash memory prices that caused customers to delay purchases.
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