By Richard Menta 5/2/07
Following a net profit of 92 million the previous quarter thanks to the holiday sales season, Creative Technology Ltd posted a loss based on lower than expected sales in the US and Asia. A third quarter loss of $23.6 million was reported on revenues of $183.8 million. Last year the company drew higher revenues of $225.7 million, but also a higher loss at $114.3 million.
The company was optimistic about revenues for the upcoming quarter. US subsidiary President Craig McHugh said that new product launches and lower costs would drive profits for the second half of 2007. "With the potential we see for these exciting new products and our continued efforts to reduce operating expenses, we are now targeting to be profitable in the second half of the calendar year, with gross margins at 20 percent or higher."
The announcement follows news from Apple, whose iPod set a non-holiday quarter sales record of over 10 million units. It will be interesting to see what digital devices Creative will offer this fall to compete with the iPod.
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