Creative Leaving Recession?

Posted by thetonyweapon in Operations on Oct 31st, 2009 | Comments

Creative’s FY2010 Q1 results were made official just a short while ago. Pretty much good news all around except in one major category: net sales, which were down nearly 50% over Q1 2009. This might typically be cause for alarm, but with a worldwide recession and no real products introduced during the quarter, it’s not entirely unexpected. The bigger news, however, is the net loss: down to $1 million US. Last year at this time, the company lost $40.8 million. Here’s the rest:

Gross Profit Margin: Up 25%
Net Loss: $1 million US. Last year, the first quarter brought nearly $40.8 million US in loss. According to the report, this was due to a 50% decrease in loss in operating costs.
Research: Down 17%. Cuts were made in areas that are not strategic for the company, whatever that means.
Gains: $4.9 million from disposal of investment, $5.8 million in foreign exchange gains, $6.2 million from Qala divestment
Losses: $15.4 million foreign exchange losses, $8.9 million in loss of financial assets because of the recession

Now as for total balance, I’m not a financial expert, and it seems as if they make these things purposely impossible to understand, but if I’m reading this correctly, the company has a comfortable balance, where they could lose a lot of money still before they go under. My tentative guess is $325 million US in the green. If someone has a better read, please let me know in the comments so I can fix it.

Q1FY10 Earnings Release