“Singapore’s Creative Technology Ltd., whose Nomad and Zen MP3 players compete with Apple’s iPod, probably swung to a quarterly loss, hit by tough competition, falling prices and inventory write-downs. Creative is likely to stay in the red in coming quarters and suffer a weaker balance sheet as it grapples with excess stockpiles and intensifying price competition in the digital music player market, which is dominated by Apple Computer Inc.,” Jennifer Tan reports for Reuters in the hilariously headlined article “Apple-rival Creative seen swinging to Q3 loss” (Creative rivals Apple as a 3.5 oz Snack Pack chocolate pudding rivals a 30-ton Sherman tank).

Tan reports that CIMB-GK Securities analyst Jonathan Ng said, “We remain negative on its prospects given the harsh competition in the market and a lack of new winning products in the foreseeable future.”

“Creative is expected to report on Wednesday that it has swung to a net loss of about US$90 million for the three months ended March 31, its fiscal third quarter, a poll of five analysts by Reuters showed. This compares with a profit of $1.1 million a year ago, excluding a one-off $14.8 million investment gain, and a $1.3 million profit in the December quarter. While Creative struggles, Apple last month posted a 41 percent jump in quarterly profit that beat Wall Street forecasts, and said sales of its iconic iPod player topped 8.5 million,” Tan reports. “‘With two-thirds of revenue derived from the highly volatile personal digital entertainment segment, we anticipate Creative will need to take further restructuring charges to right-size its operations,’ said Macquarie Research analyst Patrick Yau. The company’s net debt position will also worsen in the coming quarters, as its aggressive marketing spending and rising working capital needs eat into its cash balance, Citigroup Research analyst Pratik Gupta said.”

Full article here.
Won’t be long now.

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