eMachines Higher as Company Seeks Buyer

eMachines (Nasdaq: EEEE) jumped 25 U.S. cents to 49 cents in morning trading Tuesday — an increase of 104.2 percent — after the company, which makes low-costpersonal computers, said it hired an adviser to help it consider “strategicalternatives,” including a possible sale.

“As a result of our continuing review of strategic alternatives followingour recent restructuring, we believe this is an appropriate time foreMachines to explore opportunities to maximize shareholder value,” saidpresident and chief executive officer Wayne R. Inouye.

eMachines, based in Irvine, California, says it has sold more than 3.7million PCs through retailers, catalog companies and online merchants sinceits inception in 1998.

On April 25th, eMachines reported a loss of $31.1 million, or 21 cents pershare, on revenue of $136.2 million for the first quarter ended March 31st.The loss was wider than a year earlier, reflecting “substantial salesdiscounts and incentives” given to retailers to help them sell eMachinescomputers amid an industrywide glut.

At the time, the company predicted second-quarter sales “consistent with thefirst quarter.” eMachines said its loss for the current quarter “should onlyshow slight improvement,” as inventory liquidation continues.

During the first quarter, eMachines restructured its Internet business, andInouye took over as president and CEO. The company said it planned to testdirect sales with the launch of an infomercial.

PC makers in general are experiencing a slump in demand for their products.Dell (Nasdaq: DELL) said Monday it will lay off 3,000 to 4,000 workers over thenext two quarters as it tries to cut costs in a shrinking market. Dell wasdown 75 cents at $25.16.

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