Palm Inc. Announces Lower Q4 Revenue Outlook
Palm, Inc. today announced that fourth-quarter revenue will be approximately $230 million, compared with the previously expected $290 million to $300 million. In addition, the company said it will not meet its breakeven profitability expectations for the current quarter, which ends May 31, 2002.
Palm has cited a downturn in demand for handheld computers along with other technology products for missing prior estimates. Despite the downturn, the share of Palm branded and Palm OS handhelds in U.S. retail both grew over the last three months.
"Demand in spring did not materialize as we had previously expected, but rather market conditions deteriorated compared to both the year-ago quarter and recent months. While we remain optimistic about the long-term growth opportunities in the sector, we are disappointed that we will not meet our revenue and profitability goals this quarter," said Eric Benhamou, Palm chairman and chief executive officer. "Despite the down market environment, Palm is executing well. We expect to report improved gross margins, excellent expense management and a good cash position.
"Over the last three months, we have continued to consolidate our leadership position within the handheld industry. We remain confident that our investments in new markets, new geographies, and a new generation of handhelds will result in renewed and profitable growth in the years ahead," Benhamou said.
In addition, Benhamou said the company is on track to meet its three corporate objectives for 2002, which are as follows:
- Create two well-capitalized, profitable, high-growth companies (one largely device-oriented and the other related to the Palm operating system), each a leader in its business;
- Execute Palm's enterprise strategy on time and on budget; and
- Migrate the Palm operating system and solutions to the ARM processor.
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