PalmSource Reports Q3 FY04 Results

PalmSource today reported revenues of $21.6 million for the third quarter ended February 27, 2004, as compared to revenues of $26.3 million for the same quarter of the prior fiscal year.

Net income for the third quarter of fiscal year 2004 was $0.6 million, or $0.05 per share. Net income for the same quarter of the prior fiscal year was $0.7 million, or $0.07 per share on a fully-diluted basis.

This quarters results were within the high end of the companies previous quarterly estimates. Although the company was profitable for the period, revenues and earning were down compared with the same quarter in the fiscal year 2003. CEO David Nagel said the company is making good progress towards their goal of sustained profitability and is encouraged that the handheld market is recovering from previous declines.

At February 27, 2004, cash, cash equivalents and restricted investments were $33.3 million. Cash utilized for operating activities during the third quarter was $2.2 million.

PalmSource management's provided outlook estimates for the next fiscal quarter. It expects revenues to be in the range of $17 million, plus or minus 5%. Financial results on a GAAP basis are expected to be in the range of a net loss of $4 million to $7 million and cash flow used by operating activities is expected to be in the range of $4 million to $6 million.

Third Quarter Highlights
During the third quarter PalmSource introduced Palm OS Cobalt, a new enhanced version of the Palm operating system designed to enable the creation of innovative smartphones and new categories of devices for the communications, enterprise, education and entertainment markets. PalmSource also announced Palm OS Garnet, the latest version of the popular Palm OS 5, designed to accelerate the development of Palm Powered handhelds and smartphones.

Palm OS Cobalt made its public debut at the PalmSource Developer Conference held in San Jose, CA that featured the latest offerings from licensees, partners and developers. "Palm OS Cobalt is the most significant new software product we've developed," said David Nagel, The new Cobalt platform is optimized for the development of state-of-the-art smartphones, enterprise-strength smart mobile devices, and it will enable the creation of new classes of mobile devices to serve a wide variety of market segments."

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Let the bloodletting begin

Wollombi @ 3/18/2004 6:49:27 PM #
A net loss of $4-$7 million? I really hope this isn't the beginning of a pattern of bleeding red ink for PalmSource. Cobalt needs to live up to or exceed it's promise, and visibly so, or PalmSource will really have a problem on it's hands.


Always remember that you are unique. Just like everyone else.

RE: Let the bloodletting begin
gfunkmagic @ 3/18/2004 7:20:27 PM #
Well with cash cash investments of about $30 million and operating cost of about $2 million per quarter, they could still last a bit over a year w/o any profits...

I support


RE: Let the bloodletting begin
hoodoo @ 3/19/2004 8:44:31 AM #
Except that they're predicting they will use up $4-6 million in the 4th quarter. They'll probably issue some more equity.

Licensee breakout?

mikecane @ 3/19/2004 12:02:05 AM #
I was wondering, do they itemize their revenue streams by licensee?

RE: Licensee breakout?
hoodoo @ 3/19/2004 8:45:46 AM #
RE: Licensee breakout?
hoodoo @ 3/19/2004 8:48:20 AM #
Well... only "related party" and "third party" revenues, which eventually will become 100% third party over the next couple of quarters I suppose.



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