Gateway Inc. (NYSE: GTW) shares fell almost 10 percent Friday after the personal-computer maker reported a drop in revenue.

In its report of preliminary results for the fourth quarter, the firm said revenue slipped to $1.02 billion from $1.12 billion in the same quarter last year, missing Wall Street's average forecast of $1.05 billion. Earnings per share of 2 cents matched the average of forecasts, however

Net income for the quarter was $8.8 million compared with a net loss of $20.9 million, or 5 cents per share, a year earlier.

Gateway Chief Executive Ed Coleman attributed the revenue decline to weaker-than-normal demand in its retail business, as distributors struggled to sell computers based on Microsoft's Windows XP in anticipation for those based on the new Windows Vista operating system.

Gateway didn't immediately give a first-quarter forecast. Wall Street analysts estimate Gateway will earn 2 cents a share on $1.02 billion in revenue for the quarter.

Goldman Sachs' David Bailey believes the prices will hover near its current price for the months ahead.

With little outside of some incremental operating expense reductions to pique investor interest, we would expect the stock to remain around our $2 price target, he wrote this morning.

Shares of Gateway fell 9.30 percent, or $0.20 to $1.95 in afternoon trading on the New York Stock Exchange.