Handspring Announces Weak Revenues
Handspring, Inc. has just announced that it had $61.0 million in revenue for the fourth quarter of its fiscal 2001. Compared with same period last year, this is an increase of 18%. But compared with its previous quarter, revenue was down about 50%.
The company posted a pro forma loss, excluding special items, of $32.4 million, or 29 cents a share. Analysts had predicted a per-share loss of 32 cents. This doesn't include charges from excess and obsolete inventory of $26.8 million and other costs of of $7.9 million.
Handspring has been dealing with both greatly decreased demand for its handhelds because of the slowing economy and a price war with Palm Inc., its largest rival. Palm had a glut of devices this quarter and cut prices to stimulate sales. Handspring had to follow suit in order to remain competitive, which cut into their revenues.
As if that weren't enough, Palm's new m505 brought about a surge in sales, which cut into Handspring's market share. According to NPD Intelect, Handspring's market share fell from 19.2% in April to 15.3% in May, while Palm jumped from 62.1% to 69.4%.
"While this quarter has been a challenging one for Handspring, I am pleased with the tremendous accomplishments of the company during the fiscal year,'' said Handspring CEO Donna Dubinsky.
She went on to say, "We have adjusted to the rapid economic downturn, and have taken steps to reduce our rate of spending while continuing our investment in future products.'' This includes plans to lay off 40 employees, or 9% of the company, a delay in facilities expansion, and elimination of some marketing programs.
Dubinsky concluded by saying, "In structuring our business going forward, we have three key goals: ensure that our traditional handheld products are profitable by the end of our second fiscal quarter, focus our future investment in our wireless communications products and services, and reach profitability for the business overall by fiscal year-end 2002.''
In a related story, Handspring made current senior vice president of marketing and sales Ed Colligan chief operating officer, effective immediately.
- Handspring's Revenues Beat Analyst Estimates
- Palm Cuts Prices in the Face of Excess Inventory
- HandSpring Forum
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