palmOne Reports Q3 FY05 Results

palmOne today reported revenue of $285.3 million for the third quarter of fiscal year 2005, ended Feb. 25, up approximately 18 percent from the $242.5 million reported during the comparable quarter a year ago.

Net income was $4.4 million, or $0.09 per diluted share, measured on a Generally Accepted Accounting Principles, or GAAP, basis and reflecting certain non-recurring employee-separation costs. This compares to a loss in the year-ago period of $9.3 million, or $0.20 per share.

Net income in the third quarter of fiscal year 2005, measured on a non- GAAP basis, totaled $10.6 million, or $0.21 per diluted share, excluding the effects of amortization of intangible assets and deferred stock-based compensation and employee-separation costs. This compares to a non-GAAP net income in the third quarter of fiscal year 2004 of $0.6 million, or $0.01 per diluted share, which excluded the effects of amortization of intangible assets and deferred stock-based compensation and restructuring charges.

"We executed well and delivered strong revenue growth and gross margin during the quarter. Treo smartphone sell-through rose by almost 50 percent, and our share of the handheld-computer market expanded around the world," said Ed Colligan, palmOne president and interim chief executive officer. "Going forward, we're committed to investing in our product- development engine and software-application differentiation. We'll also work to accelerate the pace at which we bring our smartphones to new carriers and higher-speed networks."

Colligan noted the following financial highlights:

  • Revenue rose approximately 18 percent, marking the seventh consecutive quarter of year-over-year growth;
  • Gross margin rose to 31.0 percent in the quarter from 28.9 percent in the comparable quarter a year ago;
  • Operating margin was 1.8 percent, and non-GAAP operating margin was 4.0 percent;
  • Net income was $4.4 million, and non-GAAP net income totaled $10.6 million; and
  • The company generated $21.5 million in cash from operations in the quarter.

During the quarter, palmOne accomplished the following:

  • Expanded smartphone sales to include the Treo 650 across the Cingular Wireless network in the United States, building upon sales of Treo 600 smartphones and taking advantage of Cingular's high- speed Enhanced Data for Global Evolution, or EDGE, network, the nation's fastest data network;
  • Expanded the relationship with Orange in the U.K., France and Switzerland to include the Treo 650 smartphone, building upon Orange's previous sales of Treo 600 smartphones. Orange is expected to begin selling the Treo 650 in the fourth fiscal quarter;
  • Signed an agreement with Telecom Italia Mobile, or TIM, to distribute the Treo 650 smartphone in Italy. TIM is expected to begin selling the Treo 650 in the fourth fiscal quarter;
  • Announced the sale of 1.5 million units of the Tungsten E handheld computer in 14 months on the market. The Tungsten E consistently has been the best-selling handheld in the United States and represented 20 percent of all U.S. handheld sales since its introduction, according to The NPD Group; and
  • Shipped approximately 938,000 Zire, Tungsten and Treo family devices. Cumulative shipments to date total approximately 29.9 million units.

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hmm...

VampireLestat @ 3/17/2005 5:47:53 PM # Q
hmm... PalmOne looks to be in good shape.

RE: hmm...
big_raji @ 3/17/2005 6:11:45 PM # Q
Yeah, no kidding.

I'm sure PalmOne is thanking God for the Treo. :)

---
http://www.d2kin.ca

RE: hmm...
svrontis @ 3/17/2005 7:02:19 PM # Q
Let's see - based on this very brief report p1 has increasing revenue, increasing gross margin, increasing net income and increasing EPS (fully diluted) - perhaps p1 they are not so doomed as some people would have us believe.

RE: hmm...
relyons @ 3/17/2005 8:36:16 PM # Q
svrontis,

It's the fourth profitable quarter in a row!

The "Zen of Palm" continues to reign supreme. Emphasize elegance and ease of use over poorly implemented features. Define products that appeal to people, not geeks.

Congratulations, PalmOne! You deserve it!

Eric Lyons
Palm OS Software Developer
PROUD Owner of the PalmOne Treo 650

RE: hmm...
RhinoSteve @ 3/17/2005 8:37:54 PM # Q
Rebember everyone loves to knock on a winner.

Grok on this Voice!

The ProForma numbers are more bogus than usual
SeldomVisitor @ 3/17/2005 11:14:42 PM # Q
"ProForma" loosely means "excluding what we don;t wanna tell you" and, in general, means the companis using profroma numbers can hide single-hit badness.

This time around PLMO is giding the "single hit badness" of "employee-separation.

Giggle.

Have you heard how much the CEO departure is costing PLMO?

Giggle.

Pro Forma.

Giggle.

They missed Big Time.

They warned Big Time.

Pro Forma.

Whatta racket!


Woo Hoo! Palm stock skyrockets! Sucka...
The_Voice_of_Reason @ 3/18/2005 12:28:55 AM # Q
Stop your giggling, woman. Palm will live or die depending on its products and the accounting games don't fool anyone. (How much did the "split" into the two Palms add to the cookie jar? 20 million? Slick. Now ask yourself: was it worth it?)

Hengeem, I'd love to see a catfight between you and Bradley. $50 bucks on Bradley in the first round.

http://finance.yahoo.com/q/bc?s=PLMO&t=1d Up over $1 today, but likely will crash back to reality on Friday. The overall trend is showing regression to the Land of Penny Stocks:

http://finance.yahoo.com/q/bc?s=PLMO&t=6m&l=on&z=m&q=l&c=





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Press release: CUPERTINO, California — February 11, 2005 — Apple® announced today that Steve Jobs will begin selling his own feces to Apple Cultists beginning March 1. Apple's new iPoo™ lineup is expected to easily surpass the iPod shuffle as the company's most popular product. Yes, Apple Cultists can already easily create their own iPoo™, but feces didn't seem cool until Jobs told them it was cool. Remember, kids: the ONLY cool feces is Jobs' highly individualistic, rebellious iPoo™ (coming soon in six different colors/flavors, including the red [hematochezia] and black [melena] U2 GI bleed model)

*************************************************************************************





******************************************************************
Sony CLIE UX100: 128 MB real RAM, OLED screen. All the PDA anyone really ever wanted.

Shorting Palm? Get electrocuted, MoFo!
The_Voice_of_Reason @ 3/18/2005 12:44:20 AM # Q
By the way, real clever of Palm to throw cold water on the party by saying the next quarter looks grim. So much for today's gains. After hours prices are dropping around 15%. And you thought you could make a quick buck off a volatile company.

Silly rabbit! Shorts are for kids!





*************************************************************************************

Press release: CUPERTINO, California — February 11, 2005 — Apple® announced today that Steve Jobs will begin selling his own feces to Apple Cultists beginning March 1. Apple's new iPoo™ lineup is expected to easily surpass the iPod shuffle as the company's most popular product. Yes, Apple Cultists can already easily create their own iPoo™, but feces didn't seem cool until Jobs told them it was cool. Remember, kids: the ONLY cool feces is Jobs' highly individualistic, rebellious iPoo™ (coming soon in six different colors/flavors, including the red [hematochezia] and black [melena] U2 GI bleed model)

*************************************************************************************





******************************************************************
Sony CLIE UX100: 128 MB real RAM, OLED screen. All the PDA anyone really ever wanted.

RE: hmm...
sub_tex @ 3/18/2005 10:31:25 AM # Q
I'm sure there's a logical explanation for you having such an obnoxiously big and annoying signature attached to every one of your posts, but I'm hard pressed to think of any.

RE: hmm...
RhinoSteve @ 3/18/2005 1:14:25 PM # Q
So predictable Voice, so predictable.
Reply to this comment

Bad sign?

hkklife @ 3/17/2005 5:47:30 PM # Q
"Unfortunately, palmOne executives had some bad news for investors. They warned that some products they had hoped would ship early in the current quarter will actually ship later in this quarter or might even not be available until this summer.

The company did not specify which products it was referring to. It could mean either new handhelds or simply new versions of the Treo 650 for different carriers. palmOne has been unable to make enough of these smartphones to meet demand, which has hurt its bottom line.
"

The above is excerpted from Brighthand's article. I recently spoke with a Verizon regional manager who was seemingly in the know and they said the earliest possible date for them to get the Treo 650 was end of May or early June.

That said, I would not at all be surprised to see one feeble new model make it out in the April timeframe (T|E2) with the other new model delayed until May/June/July alongside the T650 for other carriers.

Anyone remmber that rumor from last month? It said the T|E2 would ship in April and a T7 would ship in May or June with a 1gb flash drive and dual wireless.



RE: Bad sign?
Masamune @ 3/17/2005 6:43:15 PM # Q
To be honest, i would be surprised if we didn't see anything at all apart from the 650 in the spring release cycle. My guess is May at the very earliest for a new device.

Reply to this comment

In a related story...

timepilot84 @ 3/17/2005 6:55:06 PM # Q
In a related story, Palmone has released an officialy statement stating that they would NOT be turning over the running of the company to the elitist curmudgeons at www.palminfocenter.com.

"We've seen what they've asked for and it just doesn't look profitable to cater to a bunch of internet whiners that want the world for bargain basement prices, however stubborn they may be. Right now we're focusing on our customers' needs with great products like the T5 and the Treo 650," said a Palmone spokesperson.


RE: In a related story...
big_raji @ 3/17/2005 7:34:09 PM # Q
Ohhhh boy... that spokesperson will rue the day...

I'm off to petitiononline.org right now!

---
http://www.d2kin.ca

RE: In a related story...
AdamaDBrown @ 3/17/2005 8:16:28 PM # Q
"We feel that offering customers what they want at a competitive price point just isn't a viable stratgy. Dell has tried doing that, and their sales are increasing three times faster than ours," the spokesman went on to say. "We can't have that. Our senior management believes that relying almost entirely on the fickle mistress that is the Treo line, and low-end Zire sales, ignoring the potenial huge-margin high-end market, is a better strategy given our level of competence."

RE: In a related story...
cbowers @ 3/18/2005 12:58:09 AM # Q
Points for humor.

Though I'll restate that I think plenty of us would be happy with at least the hardware of the competition at the same price they're selling it at. Not asking for anything that hasn't already been done (PalmOne's specialty). Though one always hopes.

Did any of you actually read the PIC Inc thread?
Masamune @ 3/18/2005 6:35:51 AM # Q
I don't like being called an "elitist curmudgeon" by anyone. PIC Inc has some truly great designs that are worth checkingout in the Off Topic section of the forum.

Masamune - Acting CEO of PIC Inc.

RE: In a related story...
LiveFaith @ 3/18/2005 9:16:47 AM # Q
Time & Adam,

That's hillarious.

Pat Horne; www.churchoflivingfaith.com

Reply to this comment

Gekko: Trot out The Quote!

mikecane @ 3/17/2005 8:51:04 PM # Q
There are children here who need an edumacationizing...

RE: Gekko: Trot out The Quote!
VampireLestat @ 3/17/2005 9:13:01 PM # Q
"Going forward, we're committed to investing in our product- development engine and software-application differentiation."

What the hell does that mean?

RE: Gekko: Trot out The Quote!
Kronen @ 3/17/2005 9:41:51 PM # Q
I was thinking the same thing, VampireLestat. The "product-development engine" might be business-speak for their Research and Development department.

Can anyone translate what "software-application differentiation" might mean?

RE: Gekko: Trot out The Quote!
HandyMan @ 3/17/2005 10:09:38 PM # Q
"software-application differentiation"

Is it so hard for them to use the word "customize software". It would've been a heck of a lot meaningful. I'm going to assume they mean their customized version of the Palm Solution suite, plus any repalcement or additions.


RE: Gekko: Trot out The Quote!
Surur @ 3/18/2005 2:48:44 AM # Q
"software-application differentiation" = Windowsmobile Treo. Remember this isn't Palmsource with Palmlinux, and PalmOne does not develop their own OS's.

Surur

RE: Gekko: Trot out The Quote!
DevPOV @ 3/18/2005 9:48:05 AM # Q
Why use small words when you can use diminutive words instead?

RE: Gekko: Trot out The Quote!
Gekko @ 3/18/2005 3:11:23 PM # Q

"Death can come swiftly to a market leader. By the time you have lost the positive-feedback cycle it's often too late to change what you've been doing, and all of the elements of a negative spiral come into play." - Bill Gates, "The Road Ahead", Chapter 3



RE: Geeko: Trot out The Quote!
The_Voice_of_Reason @ 3/18/2005 5:15:16 PM # Q
Geeko's right: Palm is now swirling in the same death spiral that WordPerfect, Netscape, etc. followed years before. It's now too late to make changes - inertia was too strong to overcome and now gravity and the Coriolis Force have taken over.





*************************************************************************************

Press release: CUPERTINO, California — February 11, 2005 — Apple® announced today that Steve Jobs will begin selling his own feces to Apple Cultists beginning March 1. Apple's new iPoo™ lineup is expected to easily surpass the iPod shuffle as the company's most popular product. Yes, Apple Cultists can already easily create their own iPoo™, but feces didn't seem cool until Jobs told them it was cool. Remember, kids: the ONLY cool feces is Jobs' highly individualistic, rebellious iPoo™ (coming soon in six different colors/flavors, including the red [hematochezia] and black [melena] U2 GI bleed model)

*************************************************************************************





******************************************************************
Sony CLIE UX100: 128 MB real RAM, OLED screen. All the PDA anyone really ever wanted.

RE: Gekko: Trot out The Quote!
Masamune @ 3/18/2005 7:53:35 PM # Q
Hmm..I haven't come across that one in either the Book Of Five Rings or the Art Of War. Perhaps it's time for a Windows version :D ?

Reply to this comment

Wow. Palm netted $4.4 million in THREE MONTHS of sales. WOW!

The_Voice_of_Reason @ 3/17/2005 9:41:06 PM # Q
So Palm has abandoned innovation and is trying to keep schlepping old hardware + old designs ad infinitum. And this strategy eked out a whole 4.4 million in profit. Good job! Let the celebrations begin!

Palm's lack of a credible response to hardware like the Dell Axims speaks volumes. They don't intend to compete. Since when did "playing out the string" become a good corporate strategy?





*************************************************************************************

Press release: CUPERTINO, California — February 11, 2005 — Apple® announced today that Steve Jobs will begin selling his own feces to Apple Cultists beginning March 1. Apple's new iPoo™ lineup is expected to easily surpass the iPod shuffle as the company's most popular product. Yes, Apple Cultists can already easily create their own iPoo™, but feces didn't seem cool until Jobs told them it was cool. Remember, kids: the ONLY cool feces is Jobs' highly individualistic, rebellious iPoo™ (coming soon in six different colors/flavors, including the red [hematochezia] and black [melena] U2 GI bleed model)

*************************************************************************************





******************************************************************
Sony CLIE UX100: 128 MB real RAM, OLED screen. All the PDA anyone really ever wanted.

RE: Wow. Palm netted $4.4 million in THREE MONTHS of sales.
relyons @ 3/18/2005 9:27:15 AM # Q
PalmOne has turned a profit for four straight quarters and lives to fight in future quarters. "Innovators" such as Handera and Sony have closed their doors or left the market.

PalmOne includes features in their products when they have matured, when they can be implemented elegantly and simply and when people (not nerds) understand and desire them. "Innovators" such as Handera and Sony have been first to the market with numerous new features. They are no longer in this market.

PalmOne's Treo 650 continues to be a strong competitor to RIM/Blackberry in the emerging martphone category. Dell has no presence. Windows Mobile has little presence.

Please read "Piloting Palm." This book should help you to understand PalmOne's continued success in lieu of delivering products with fewer overall features than its competitors.

If "Piloting Palm" doesn't help, please read "The Inmates Are Running The Asylum" by Alan Cooper.

If you ignore these books or they didn't change your mind, well... you're beyond hope.

RE: Wow. Palm netted $4.4 million in THREE MONTHS of sales.
mikecane @ 3/18/2005 7:59:42 PM # Q
>>>Please read "Piloting Palm."

Geez, I hope he's not asking ME to read it. I only REVIEWED the damned thing on this very site!

RE: Wow. Palm netted $4.4 million in THREE MONTHS of sales. WOW!
The_Voice_of_Reason @ 3/18/2005 9:46:49 PM # Q
PalmOne has not made a significant GAAP profit for four straight years and is on life support. "Innovators" such as Handera and Sony tried to evolve the platform in ways that would provide sustainable business models. Palm preferred to leech off the hard work of its licensees.

PalmOne includes features in their products only when they absolutely have to (because EVERYONE else already has already introduced these features), when they can be implemented cheaply and when people (not nerds) would start to realize they are getting ripped off with sh!tty hardware. "Innovators" such as Handera and Sony have been first to the market with numerous new features. They are no longer in this market - Handera because Palm screwed them and Sony because the PSP is a Sure Thing and recent losses within Sony's electronics division have made company start trimming its lineup.

PalmOne's Treo 650 continues to be a weak competitor to RIM/Blackberry in the emerging smartphone category. Dell has no desire for a presence. Windows Mobile has a greater presence than Palm, with a MUCH larger selection of devices available.

I read read "Piloting Palm" when you were still in diapers sucking on yo' mama's teat. (Yesterday?) This book should help you to understand why the "Zen of Palm" BS has lead to stagnation in innovation, resulting in pa1mOne's continued failure, delivering weak products with fewer overall features than its competitors.

If "Piloting Palm" doesn't help, please read "Pigs at the Trough" by Arianna Huffington.

http://www.amazon.com/exec/obidos/ASIN/1400047714/104-8321768-1350360

If you ignore these books or they didn't change your mind, well... you're beyond hope.







*************************************************************************************

Press release: CUPERTINO, California — February 11, 2005 — Apple® announced today that Steve Jobs will begin selling his own feces to Apple Cultists beginning March 1. Apple's new iPoo™ lineup is expected to easily surpass the iPod shuffle as the company's most popular product. Yes, Apple Cultists can already easily create their own iPoo™, but feces didn't seem cool until Jobs told them it was cool. Remember, kids: the ONLY cool feces is Jobs' highly individualistic, rebellious iPoo™ (coming soon in six different colors/flavors, including the red [hematochezia] and black [melena] U2 GI bleed model)

*************************************************************************************





******************************************************************
Sony CLIE UX100: 128 MB real RAM, OLED screen. All the PDA anyone really ever wanted.

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