Creative has announced a net loss of US$32.4M ending last quarter while the revenue is slightly higher at $155.7M compared to $141.2M the previous quarter. The loss is expected and the COO of Creative has hinted on more difficult times ahead of the company.

Looking at the balance sheet in details, Personal Digital Entertainment business still contributes more than 50% of the revenue and it is no doubt Creative will continue to put more emphasis into it. Their soundcard business, on the other hand, has been pretty stagnant while their speakers and headphones business is seeing some declines.

It seems it would take a miracle to turn around Creative’s book right now. However, the recent announcement of the Zii platform could inject some hope into the business. Now, what is left to be done for Creative is to get as many developers on board Zii platform and develop innovative products based on Zii.

Certainly, we would be waiting patiently for the first Zii product to be out. It is rumored to be a touchscreen PMP with computing and WiFi functionalities out somewhere in Q2. I would reckon and hope that it is using embedded Linux so software developers could write apps to run on it. Creative is moving towards Open Source which is one step in the right direction.

Creative has announced a net loss of US$32.4M ending last quarter while the revenue is slightly higher at $155.7M compared to $141.2M the previous quarter. The loss is expected and the COO of Creative has hinted on more difficult times ahead of the company.

Looking at the balance sheet in details, Personal Digital Entertainment business still contributes more than 50% of the revenue and it is no doubt Creative will continue to put more emphasis into it. Their soundcard business, on the other hand, has been pretty stagnant while their speakers and headphones business is seeing some declines.

It seems it would take a miracle to turn around Creative’s book right now. However, the recent announcement of the Zii platform could inject some hope into the business. Now, what is left to be done for Creative is to get as many developers on board Zii platform and develop innovative products based on Zii.

Certainly, we would be waiting patiently for the first Zii product to be out. It is rumored to be a touchscreen PMP with computing and WiFi functionalities out somewhere in Q2. I would reckon and hope that it is using embedded Linux so software developers could write apps to run on it. Creative is moving towards Open Source which is one step in the right direction.

Heres’ the press release :

SINGAPORE – Jan. 22, 2009– Creative Technology Ltd today announced financial results for the second quarter of its 2009 fiscal year, ended December 31, 2008. All financial results are stated in U.S. dollars.

Revenues for the second quarter were $155.7 million, compared to revenues of $262.5 million for the same quarter last year. Net loss for the second quarter was $32.4 million, with loss per share of $0.44. This compares to net income of $7.6 million with earnings per share of $0.09 for the same period last year.

“Based upon the continuing decline we saw in market conditions in the second quarter, we took aggressive actions to reduce our inventory position, which negatively affected our gross margins in the period. We reduced our inventory position to $57.3 million, a 45 percent reduction from last quarter. Our performance was further impacted by the downward shift in other currencies against the US dollar from the previous quarter, which reduced our revenue and gross margins in Europe and contributed to a significant currency exchange loss in the period,” said Craig McHugh, president and COO of Creative. “Looking forward, we expect that the difficult market environment will continue to deterioriate. We are evaluating the structure of our field organizations so we can significantly reduce our operating expenses.”

Share Buyback Program
During the second quarter, Creative purchased 4.65 million shares under its share buyback program at an average price of  $2.44.

creative 1 Creative Reports Further Loss   Needs Some Zii Miracle