Newly Public EMachines Reports Mounting Losses

Bargain computer maker EMachines Inc. posted widening losses in its first quarter as a public company, with strong sales growth outweighed by slim profit margins and heavy promotional and acquisition costs.

The Irvine company, which ranks third in U.S. personal-computer sales, reported a net loss of $9.5 million, or 13 cents a share, for the first three months, much deeper that the $872,000 loss for the like period a year ago.

Quarterly sales jumped 82% to almost $250 million.

EMachines, founded in late 1998, came out of nowhere to outsell giants like IBM and Apple by offering personal computers for as little as $399. Its profit margins, however, are about 4.7%, far lower than other computer manufacturers’.

Last month, investors greeted the company’s initial public offering of stock with skepticism, leery of its losses. The stock gained $1.06 Thursday to close at $6.19 a share, but has lost 38% of its value since it started trading at $10 a share.