Handspring's Revenues Beat Analyst Estimates

Handspring, Inc. just announced good results for their most recent quarter. They had revenues of $123.8 million, an increase of 261% compared to last year, and 7% over last quarter. This exceeded analyst estimates. Still, the company took a loss of $6.7 million, or 6 cents a share, meeting analysts' estimates. But even this is an improvement; in the same quarter a year ago, they lost 13 cents per share.

For next quarter, they stand by earlier revenue estimates of $130 million to $136 million but admit that revenue will probably come in at the bottom of the range.

They said revenues will be slightly weak because of softer demand and Palm's recent price cuts. "It is clear that the current economic slowdown is having some impact on near-term growth," said co-founder and CEO Donna Dubinsky. However, she sees a "softness in demand rather than a precipitous decline."

Handspring's stock had a good day. Shares rose $2.20, or 18.3%, to $14.25 during the regular session. Since the release of the announcement, they have risen to $15.02 in after-hours trading.

"We are pleased with the results of the quarter, particularly our ability to achieve revenue growth in what is usually a sequentially down quarter in our industry," said Ms. Dubinsky. "We believe this growth demonstrates both acceptance of our new products as well as ongoing growth in the handheld computing sector in spite of an economic slowdown."

Everything isn't rosy for the company, though. Total costs ballooned from $56 million in the same quarter a year ago to $151 million this quarter.

Handspring had been expected to have a weaker quarter that this after Palm announced that their most recent quarterly earnings were lower than expected and that their next quarter would be dismal.

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