Creative posts Q1 financial results — things are tough
For the quarter beginning July and ending September, they’ve posted net sales of $280.2M (up one third from year ago quarter), net income $691K (down from $4.8M). Had a one-off gain from investments not happened, they would have recorded a $9.3M net loss.
MP3 players sales were up 123% and revenue sales more than doubled compared to the year ago quarter; the sales of personal digital entertainment divison now account for two thirds of the company’s total sales
The key goal for the company is to return to profitability by the end of the current calendar year; they hope to sell loads of Xtreme Fidelity and X5 sound cards (we had reported they’re changing to focus on sound cards), grow in the “speakers for MP3 players” market, maintain monentum on the MP3 player market (good luck with that), and reduce inventory (always a wise move).
Some final notes:
- Craig McHugh, the head of Creative Technology’s US unit, says there’s gonna be a shortage of 1GB MP3 players this holiday season, thanks to the Apple/Samsung deal. (The Nano doesn’t use 1GB chips, but apparently, the factories that make these are focused on the 2GB/4GB chips now.)
- Sim Wong Hoo, chairman and CEO of Singapore-based Creative, says the Apple/Samsung deal won’t last long because Samsung’s selling the chips for such a low price, it has nothing to gain (” it’s really a one-sided deal”).
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