Sales for the third quarter were in line with the Company’s expectations at $263 million. This compares to sales of $330 million for the same quarter of last year.
The Company reported a net loss for the quarter of $101.0 million or $1.27 per share. This includes one-time charges of $31.0 million and a write-down of investments of $75.4 million, which accounted for a combined $106.4 million or $1.34 per share. Excluding these charges, the Company would have reported net income for the quarter of $4.6 million or $0.06 per share. Comparative results for the third quarter last year were net income of $88.3 million and earnings per share of $1.01. This included net investment gains of $70.6 million or $0.80 per share.
The third quarter one-time charges include a previously announced restructuring charge totaling $19.8 million, which comprises $7.8 million applied to cost of goods sold and $12 million of operating expense charges. Also included in operating expenses is a one-time charge of $11.2 million resulting from the write-off of the remaining value of the assets previously acquired from Aureal Semiconductor. The Company also took a $75.4 million write-down against its investment portfolio. This includes a previously announced $65 million write-down of privately held technology companies, consistent with the Company’s prior announcement; and a net unrealized loss of $10.4 million on quoted investments, reflecting the further worsening of public equity markets at the end of the quarter.
Sales for the first nine months of fiscal year 2001 were $994.4 million, compared to $1.036 billion for same period in the previous year. Net loss for the first nine months of fiscal year 2001 was $56.9 million, or $0.72 per share, including the previously noted one-time charges and write-down of investments totaling $106.4 million in the quarter, and net investment gains of $2.9 million from the previous two quarters. This compares to net income for the first nine months of the previous year of $143.6 million or $1.66 per share, including net investment gains of $84.2 million.
Between the difficulty of the economic climate and the restructuring of our businesses, this was a challenging quarter, said Craig McHugh, president of Creative Labs, Inc. However, we achieved some important successes during the period. We made significant reductions in our operating expenses that will better position us going forward. At the same time, we met our revenue target as we continued to generate strong demand for retail audio products. We substantially reduced our inventory level, achieving our target of net inventory of $200 million at the end of the quarter. And, excluding the effect of the restructuring charges on cost of goods sold, we met our margin guidance of 27%.
During the quarter, we sustained, for the first time, a net loss from our investment portfolio, said Creative Chairman and CEO Sim Wong Hoo. The $75 million write-down from our investment portfolio should be taken in the perspective that we posted realized gains of $103.4 million in fiscal year 2000, including $70.6 million for the same quarter last year. Many of our investee companies were hit hard by the downturn in the private and public equity markets, causing us to write-down our holdings. However, we do believe that a number of our investee companies continue to show promise, both strategically and financially.
At the same time, we took serious actions to better position Creative in a tough marketplace, continued Sim. These actions, including measures to reduce the cost of our products and aggressive pricing on the NOMAD Jukebox, position us to increase market share and solidify our leadership position in the strategic digital audio player market. The digital audio player market represents huge potential; and, with our lower cost structure, we plan to drive this market and capitalize on it.
During the quarter, Creative continued its share buy-back program, repurchasing approximately 892,000 shares at a cost of $8.6 million. Subject to market price and conditions, and securities law restrictions, the Company plans to continue its buyback program.
