Comments on: Palm Announces Latest Quarterly Earnings
Palm shipped approximately 900,000 Palm-branded handhelds during this quarter. This is down from the 1.3 million shipped last quarter.
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RE: thats a lot
Even then my guess, from their last few statements, it looks like they would have actually 'shipped' 780,00 or so. Not bad for a company that is dying a slow death.....
RE: thats a lot
If MS PPC group had to stand on it's own 2 feet with out the bottomless resources of the whole company, they would have been dead 4 yrs ago. PPC does not make $$ for MS - but hey they can continue to pour millions into this money loser for years until they drive the competition out, or give up. Of course, this is not likely, they know this is the future, so they will continue to build marketshare (even if that means as slowly as they have been doing so far) by being willing to lose billions if they have to.
RE: thats a lot
Greetings from Europe.
Early report?
Scott
no reports from sony?
RE: Early report?
Just because Palm announced their earnings today doesn't mean every body needs to announce it today.
RE: Early report?
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News Editor
OK - considering last years mistakes and the current market
RE: OK - considering last years mistakes and the current market
I think that Palm is doing a nice job by (apparently) splitting their product line into 3 groups to target the hip young kids/first time buyers, the executives who want a slim, sleek form factor and then the wireless sector, which will only grow in the coming months/years.
They are using their meagre resources wisely and, once the m100 and 105 are finally put out to pasture in favor of the new OS5 units this fall, will have a pretty nice product mix. Heck, it's already looking pretty good as most of the major "price points" are already covered (albeit all about 10-15% higher priced than they should be)
RE: OK - considering last years mistakes and the current ma
> in favor of the new OS5 units this fall
The m100/m105 are much more likely to be replaced by something akin to the m125/m130 than any OS 5 unit.
Accounting Jargon
You can find the numbers here:
http://makeashorterlink.com/?E41265221
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News Editor
RE: Accounting Jargon
The original intent of "pro forma" was to eliminate certain costs from the income statement that mask the underlying profitability of the ongoing business. For example, generally accepted accounting principles (GAAP in CPA talk) require a company to record certain non-cash events as a charge to profit. As a result, a company can actually be taking in more cash than it spends and sell its products for more money than they cost to produce but show a net loss using GAAP.
Pro forma financials were all the rage during the dot com bubble, when the amortization of acquisition costs and depreciation of capital investments made many companies' financials look awful (and not without justification in most cases.) Unfortunately, there is no standard definition of "pro forma" and it is frequently abused by companies that are losing money but want to look like they are profitable.
In Palm's case, their pro forma adjustments look to be largely one-time costs from last year's inventory glut and breaking the company into two pieces. They are still losing money on the fundamentals (sales vs. cost of goods sold, R&D, and S&GA) but it's getting better. Let's hope they have their problems behind them and are back on solid footing for the future.
By the way, I am not an accountant so nothing in here should be construed in any way, shape, or form as accounting or financial advice...
RE: Accounting Jargon
I think all those amounts are getting to the same place, Ed.
First we have the 4th quarters for 2002 and 2001, then the year-end totals for 2002 and 2001, by segment (hardware and software being the two segments, obviously).
RE: Accounting Jargon
One thing to watch out for though: so-called 'one-off' charges have a habit of being repeated. Be extra careful with this stuff.
You know, I have a book published in 1934 which warns about this sort of thing. But people never learn. When I read the newspaper headlines, it looks to me like history repeating ...
PalmSource losses
Scott
RE: PalmSource losses
RE: PalmSource losses
For this quarter:
Palm sold/shipped 0.9 million units
PalmSource's revenue = 18.7 million
My *rough* guess: using market share as a reference, total PalmOS PDA sold/shipped this quarter = 1.3 million
Assuming PalmSource's only revenue comes from PalmOS license, for each PalmOS PDA sold, PalmSource gets $18.7 / 1.3 = $14.3.
The actual figure would probably be $12 to $15.
RE: PalmSource losses
RE: PalmSource losses
To be going to war with MS in the OS game and having to put resources into such major OS upgrades - not just OS 5, but already prepping OS 5.5/6 (if we can trust there road-map), costs a lot of bucks considering the meager licence fee they get for each palm os pda sold. There are only (at best) a couple of million palm os pdas sold each quarter, and with approx $10 a pop - how do expect them to be rolling in profit?
RE: PalmSource losses
Again, my concern is that PalmSource should be pretty lean. They should be enjoying profitability, not losses.
Can anyone else add some insight as to why the losses of PalmSource could be so significant?
Scott
RE: PalmSource losses
PalmSource Inc. Expenses
RE: PalmSource losses
I also hate to see PalmSource trim the fat by cutting jobs. Too often companies "save" money by cutting lower-level jobs while the CEOs keep their inflated salaries. Then projects have to get cut or end up getting done late and/or shoddily. I'm sure they have some great cost saving opportunities with the CEO positions (either by eliminating some of them entirely or just cutting the salaries).
Am I insane here?
Scott
A tough road to hoe...
(BTW, speaking of the developer conference, anybody know when the next one is? This is a great place to learn a lot of things that are posted as "breaking" news months later :) )
Road to hoe
RE: PalmSource losses
That had to cut into profitability.
RE: PalmSource losses
Hmmm - there you go. 300 x $60,000 (lets pretend they pay these guys peanuts) = $18 mil. Of course, i dont know but i am assuming the average Palm employee makes atleast more than $60,000. So to the guy who keeps posting about 'not getting it' - whats to get. palmInc (hardware guys) charge a hell of a lot more than $10 per unit sold - their profits (even w/price war) on each unit are much higher than this. So what is so confusing about PalmSource not raking in the $$$ ?? basic math - even if these estimates are wrong it still doesn't add up to large profits for PalmSource. A lot of news and attention because of the platforms success & ubiquity - but that doesn't nescesarily translate to profit.
RE: PalmSource losses
OK, let's assume these numbers were all that there were (which, of course, they're not). The problem I have is that based on their 300 employees at average $60,000 and based on them charging $10/license, they would need to sell a significantly larger number of licenses in order to turn a profit. In other words, the business model is flawed.
But, I don't think that the business model _is_ flawed, because I think that it is, in fact, _very_ possible for them to turn a very nice profit even selling the licenses at $10. The reason being that I don't think that the numbers that we're playing with here are accurate. I think that there's a lot more to what comes in (reader software, ebooks, etc.) and an even larger amount of fat that can be trimmed (high-ranking salaries & positions).
Off topic, but I guess I never really understood the Be aquisition, either. I'm not saying that it wasn't a great idea to hire all of these Be execs/employees, just that considering that the company was bankrupt anyway, why buy it instead of just courting the employees? I still find it difficult to believe that they would be able to use enough of what the BeOS was in a PDA that purchasing the intellectual rights to it was necessary, but with a StrongARM processor and larger RAM, maybe I'm wrong.
Scott
RE: PalmSource losses
By the time you tack on overhead it typically costs 2x to 3x their salary, so say 2.5 (probably too low). 2.5 x 300 x $60,000 = $45 mil.
I didn't think they paid very much for Be. Things like OS 4.1 upgrades add to the profits. They get money from Handango for web software sales. On top of all that, they probably make large sums off of enterprise related applications and development.
RE: PalmSource losses
Palm does well!
RE: Palm does well!
This is why ''quality of earnings'' matters
Question for ED!
RE: Question for ED!
<sheesh>
RE: Question for ED!
Not bad
Looks like awfully low-quality earnings to me
Look at the very end of the release, at the caption headed "Reconciliation of segment operating loss to net loss"...
Last year they wrote down inventory $268 million dollars. Now this year they have written inventory back up $101 million. Basically it looks like they "overestimated" their writeoff in 2001, which they knew would be terrible, and "borrowed" some income for 2002.
If you shift that "overestimate" back to 2001, where it really belongs, you have a 2001 after-tax loss of roughly $280 million (still terrible) and a 2002 loss of roughly $150 million -- almost double the current year loss.
Cookie jar accounting strikes again.
RE: Looks like awfully low-quality earnings to me
Even further, results are now "magically" within two cents of analyst expectations of a loss of three cents per share. I know these are unaudited numbers, but please tell me Andersen isn't their auditor.
Latest Comments
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thats a lot
its hard to believe people are still buying stuff from palm or any company seeming as if tons of people already have one.
anyway good job palm for making it over what they predicted.
now only if to hear from sony.
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