Palm Inc. Profits Higher Than Expected

Posted By: Ed Thursday, June 29, 2000 8:53:50 AM

Palm reported their fourth-quarter profits yesterday and the company's net income was $16.3 million or three cents a share for the quarter ended June 2. Wall Street had estimated profits of one cent a share. Their fourth-quarter 1999 profits were only $6.8 million. The stronger profit was helped by a doubling of revenue to $350.2 million from $174.3 million the prior year. These profits don't reflect costs brought about by the split-off from 3Com. Including those costs, net income for the fourth quarter was $12.4 million, or two cents per share.

Palm shipped more than 1.1 million devices in the quarter, bringing total shipments to more than 7.1 million.

"We are delighted to have delivered such excellent results in Palm's first full quarter as an independent public company," said Carl Yankowski, Palm's chief executive officer. "The impressive year-over-year and sequential revenue growth - from a very strong third fiscal quarter -- tells us consumers and businesses believe Palm offers the solutions they need. What's even more impressive is that we achieved these results despite industrywide component shortages. We believe Palm's aggressive marketing efforts and the visibility of our IPO have been major factors in stimulating the total market demand for handhelds.

"This quarter also is notable for the company transition underway," Yankowski said. "While building on Palm's strength in devices, we also are committed to leading in the mobile Internet solutions and services space. Our vision is clear and our execution and momentum have been outstanding."

"Our close relationships with key suppliers helped us respond to phenomenal demand," said Judy Bruner, Palm's chief financial officer. "The Palm operating team delivered more than 1.1 million devices in the quarter, which increases our cumulative shipments to more than 7.1 million. At the same time, Palm continued to manage its balance sheet extremely well, with inventory turns of 32 and days sales outstanding of 31."

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