Creative warned that it expects sales for 3Q ending around US$30-40mln versus a profit of US$3mln last March ‘09 to come in around US$80mln, down year and loss of US$32mln last quarter. As announced significantly from last year’s US$150mln and laston 13 March ’09, this quarter would see another quarter’s US$156mln reflecting the negative impact US$10mln restructuring charge.

from the global economic downturn as well as the closure of certain businesses. The continued losses will erode shareholders funds of US$246.4mln further to US$200mln, putting its Gross margin of 10% also weakened significantly price to book at 1x versus its usual 0.7x. from last year’s 23% and last quarter’s 15.5%. As a result, gross profit of only US$8mln represents a While the stock has declined 15% since our significant 77% yoy and 67% qoq decline.

downgrade to sell in Jan ’09, without signs of an imminent turnaround, continued erosion of its Assuming slightly lower cost structure as compared shareholders funds and still demanding valuations, we to 2Q ended Dec ’08, bottom-line loss would be maintain SELL.