Palm Beats Analysts' Expectations, Revenues Up 30%
While Palm's most recent quarter was far from the best in the company's history, neither was it the worst and it did better than the pessimistic predictions of market analysts. The company reported a net loss of $32.4 million, or 6 cents per share, for the first quarter of its fiscal 2002. After excluding special items, it had a loss of $38.7 million, or 7 cents a share, which is better than the 9-cent loss that had been predicted by analysts. In a related announcement, the PalmSource conference which had been scheduled for next month, has been postponed.
It had $214 million in revenues during the quarter, which is in the range that was predicted by the company in July. Palm's revenues were 30% higher than in the previous quarter.
It had sales of approximately 750 thousand Palm branded handhelds. That brings the grand total to over 14 million ever sold.
Palm's CEO sounded a note of cautious optimism. "While there is much yet to do, we made significant progress on key operational goals in the quarter despite continuing worldwide economic uncertainty and growing competition."
Recently, there had been slowing demand for handhelds as the economic situation in the U.S. and around the World worsens. This has helped set off a price war among the Palm and its licensees that has cut margins to the bone.
This was exacerbated by Palm's poor handling of the roll-out of the m500 series which eventually left the company with large number of unsellable obsolete inventory.
Still, the company is working hard to dig itself out of the hole. The company has cut operating costs by about 25% and reduced the amount of inventory it has in the channel.
Palm's top executives knew going into its first quarter of fiscal 2002 that it would not be a profitable one but they had hoped that the current one will be. They now say that they expect to take a small loss this quarter, too.
"We had expected to generate a small operating profit in Q2, [but] while working toward profitability remains a top priority, we now believe it will take beyond Q2 to achieve this goal,'' said Chief Financial Officer Judy Bruner.
In a related announcement, the PalmSource conference which had been scheduled for next month, has been postponed.
"We're postponing PalmSource out of respect for those affected by last week's events and the related concerns expressed by registered attendees and sponsors,'' said David Nagel, chief executive officer of Palm's Platform Solutions Group.
Palm plans to reschedule the event for later this year or early next year and will announce further details later on.
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