Creative to miss Q4 revenue target by 10 percent

Multimedia hardware supplier Creative Technology Ltd. will miss its fourth-quarter revenue projections by about 10 percent, the company said in a statement Tuesday. Revenue for the fourth quarter was originally estimated at US$260 million.

The lowered projection of about $234 million represents a 24 percent drop in revenue from the record $307.7 million posted by the company in the fourth quarter last year.

Creative supplies audio and video cards for PC system builders as well as selling its own range of MP3 audio consumer devices. The system builder business saw a continued downturn in the quarter, and the company will increase its focus on the consumer business, according to the statement.

Creative saw particularly weak sales in Europe in June, the company said. Recently, market analyst International Data Corp. (IDC) warned that hardware sales to the European market were slowing as the effects of the U.S. economic slowdown began to be felt in Europe.

Nasdaq-listed Creative has endured a difficult year. In its third quarter, it posted a loss of $101 million on sales that were down by 20.4 percent from the same quarter the previous year at $263 million.

In March, the company announced plans to cut its global workforce by 10 percent as a cost-cutting measure. The company will continue its efforts to reduce operating costs, Creative said in Tuesday's statement.

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David Legard

PC World
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