Creative Technology slipped into the red in the third quarter to March, dragged down by worse-than-expected sales in the key US and Asian markets, the Singapore digital entertainment products maker said Wednesday.
For the January-March period, the company incurred a net loss of US$23.61 million, compared with a profit of US$92.12 million in the previous quarter, the Nasdaq and locally-listed company said.
Compared to last year, the net loss in the third quarter is smaller than the US$114.33 million loss recorded in the March quarter in 2006.
Sales in the third quarter were US$183.83 million, down from US$424.36 million in the previous quarter and US$225.66 million a year ago.
"Our sales for the quarter in the United States and Asia came in below our expectations, with worldwide revenues coming in at 183.8 million," said Craig McHugh, president of subsidiary Creative Labs Inc.
The Singapore outfit, which has struggled to compete against Apple's iconic iPod, saw its market share in the Americas region falling further, to 32 percent in the third quarter from 34 percent in the previous quarter and from 41 percent a year ago.
In Asia and the rest of the world, Creative's market share was 19 percent, up from 15 percent in the previous quarter but down from 21 percent a year ago.
During the third quarter, Creative incurred restructuring charges of US$3.5 million to reduce its global headcount by 10 percent as part of the company's plans to lower operating expenses.
The company is aiming to cuts its operating expenses to US$50 million by the end of the September quarter, said McHugh.
With the cost-cutting measures and range of new products in the current quarter, Creative aims to return to profitability in the second-half of the 2007, he said.
Founded in 1981, Creative gained fame for its SoundBlaster cards that allowed personal computers to be used as home entertainment centres but it has struggled since venturing into consumer electronics.
In the MP3 market where the company has invested heavily in, Creative has found it an uphill battle to challenge iPod, the world's most popular digital music player which sold over 10 million units in the first three months of the year.
For the January-March period, the company incurred a net loss of US$23.61 million, compared with a profit of US$92.12 million in the previous quarter, the Nasdaq and locally-listed company said.
Compared to last year, the net loss in the third quarter is smaller than the US$114.33 million loss recorded in the March quarter in 2006.
Sales in the third quarter were US$183.83 million, down from US$424.36 million in the previous quarter and US$225.66 million a year ago.
"Our sales for the quarter in the United States and Asia came in below our expectations, with worldwide revenues coming in at 183.8 million," said Craig McHugh, president of subsidiary Creative Labs Inc.
The Singapore outfit, which has struggled to compete against Apple's iconic iPod, saw its market share in the Americas region falling further, to 32 percent in the third quarter from 34 percent in the previous quarter and from 41 percent a year ago.
In Asia and the rest of the world, Creative's market share was 19 percent, up from 15 percent in the previous quarter but down from 21 percent a year ago.
During the third quarter, Creative incurred restructuring charges of US$3.5 million to reduce its global headcount by 10 percent as part of the company's plans to lower operating expenses.
The company is aiming to cuts its operating expenses to US$50 million by the end of the September quarter, said McHugh.
With the cost-cutting measures and range of new products in the current quarter, Creative aims to return to profitability in the second-half of the 2007, he said.
Founded in 1981, Creative gained fame for its SoundBlaster cards that allowed personal computers to be used as home entertainment centres but it has struggled since venturing into consumer electronics.
In the MP3 market where the company has invested heavily in, Creative has found it an uphill battle to challenge iPod, the world's most popular digital music player which sold over 10 million units in the first three months of the year.
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