Palm Inc Reports Q3 Financial Results
Palm Inc today reported revenues of $209 million for the third quarter of fiscal year 2003, down almost 30% from the same quarter a year ago. PalmSource has posted its first profitable quarter and Palm Powered handhelds accounted for 71 percent of all personal digital assistants shipped in the second half of 2002.
Palm, Inc. which consists of two operating units -- Palm Solutions Group and PalmSource -- today reported revenues of $209.0 million for the third quarter of fiscal year 2003, ended Feb. 28, 2003, down 28.6 percent from the $292.7 million reported during the comparable quarter a year ago. PalmSource reported it?s stongest quarter to date with $26.3 million in revenue and $6.6 million in income.
Non-GAAP net loss in the third quarter totaled $26.5 million, or $(0.91) per share. This compares to a non-GAAP net loss in the third quarter of fiscal 2002 of $14.0 million, or $(0.49) per share, which excluded the effects of the reduction in special excess inventory costs and amortization of intangible assets. Non-GAAP net income in the second quarter of fiscal year 2003 was $5.7 million, or $0.19 per share, which excluded the effects of amortization of intangible assets, separation costs, and restructuring charges. All earnings-per-share figures have been adjusted for the 1-for-20 reverse stock split effective Oct. 15, 2002.
For the third quarter of fiscal year 2003, net loss, as measured by generally accepted accounting principles (GAAP), was $172.3 million, or $(5.93) per share. This net loss included restructuring charges of $40.2 million and impairment charges of $102.5 million, both described in a March 3, 2003 press release. The restructuring charges related to rationalizing real estate locations and reassessing the ability to sublease vacant facilities; severance payments related to layoffs; and other items related to right-sizing Palm Solutions Group and PalmSource. The impairment charges included a non-cash charge of $100 million to reduce the carrying value of the 39 acres of land owned by the company in San Jose, Calif. to the current fair market value and a $2.5 million impairment of intangible assets. For the third quarter of fiscal year 2002, net income was $2.9 million, or $0.10 per share and for the second quarter of fiscal year 2003 net income was $3.5 million, or $0.12 per share.
"The progressive recovery of the handheld industry is continuing, although still held back by weak economic fundamentals. We are pleased to post the first profitable quarter of our PalmSource subsidiary. Palm is determined to return to sustained profitability, without sacrificing its participation in the growth drivers of the next chapter in the handheld industry," said Eric Benhamou, Palm's chairman and chief executive officer.
Benhamou noted the following year-over-year improvements:gross margins of 31.3 percent vs. 29.2 percent; operating expenses of $86.5 million vs. $105.2 million, and Inventory of $23.3 million vs. $50.6 million.
According to IDC's study in the United States, Palm Powered handhelds accounted for 71 percent of all personal digital assistants shipped in the second half of 2002. Palm Powered smart phones led the U.S. converged handheld space with a market share of 79 percent in 2002, IDC said.
Based on the first two quarters of shipping data, the Palm Zire handheld is the fastest-growing handheld in Palm's history with shipments totaling more than 850,000 units. Palm SG shipped approximately 1 million Palm branded handhelds, bringing cumulative shipments to more than 21 million.
Article Comments(54 comments)
This article is no longer accepting new comments.
Click here for the full story discussion page...
- I got one -Tuckermaclain
- I got one -Tuckermaclain
- RE: Don't we have this already? -Tuckermaclain
- RE: Palm brand will return in 2018, with devices built by TCL -richf
- RE: Palm brand will return in 2018, with devices built by TCL -dmitrygr
- Palm phone on HDblog -palmato
- Palm PVG100 -hgoldner
- RE: Like Deja Vu -PacManFoo