Handspring Announces Decent Quarterly Results

Posted By: Ed Tuesday, January 15, 2002 5:07:12 PM

Handspring has just reported financial results for its most recent quarter, which ended Dec. 29. The company reported revenues of $70.5 million. This is a 15% increase from the previous quarter but down almost 40% from the same quarter a year ago. Handspring had a net loss of $19.8 million, or 16 cents a share, compared to a loss of $15.2 million, or 15 cents per share, a year ago.

Excluding special items, the company lost $14.4 million, or 12 cents per share. The consensus from analysts had been that this loss would be 14 cents a share with revenues of $62.7 million. Therefore, the company out-performed the analyst's expectations.

All of the Palm OS manufacturers have been participating in a punishing price war over the past year. This has hurt profits for all of them. At the same time, the market for all handhelds has slowed as the U.S. economy slid into a recession.

In December, Palm Inc. reported quarterly revenues down 44% from the same quarter a year ago and a loss of 6 cents per share.

But there was some very good news. Handspring increased its gross margins on each handheld this quarter to 17%, up from a meager 9% the previous one.

"I am pleased that we were able to achieve our business objectives for the quarter," said Handspring CEO Donna Dubinsky. "We participated well in the holiday demand, and exited the quarter with channel inventory within our target range. We also strengthened our balance sheet with an additional $47 million in cash through a follow-on stock offering and an additional investment from QUALCOMM."

With the additional financing, the company's ending cash and investments balance was $175.5 million, of which $124.8 million was unrestricted.

Though Handspring has not yet had a profitable quarter since it was founded, in December, Ms. Dubinsky predicted that her company would be profitable by June. Since that announcement, Handspring's stock has gained steadily, closing up a bit today at $7.78.

Handspring has promised to announce its new handhelds, the wireless Treo line, before the end of this month. Much of the company's optimism for its future is based on the strong interest in these models, which have both wireless voice and data capabilities.

This is Part One of a three part series on Handspring's quarterly report and the associated converence call. Part Two covers the delay in the Treo and Part Three is about Handspring's plan to phase out the Visor. -Ed

Related Information:

PIC: Handspring Expects to Be Profitable by June
PIC: Palm Quarterly Revenues Up 36%
PIC: HandSpring Forum

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handspring is gonna be dead

I.M. Anonymous @ 1/15/2002 5:25:10 PM #

in about 2 years we they keep producing such crappy handhelds.

RE: handspring is gonna be dead

I.M. Anonymous @ 1/15/2002 5:27:27 PM #

GET A LIFE

RE: handspring is gonna be dead

I.M. Anonymous @ 1/15/2002 5:45:57 PM #

We would prefer that u be dead...

RE: handspring is gonna be dead

I.M. Anonymous @ 1/15/2002 7:09:48 PM #

Stardate : January 2004.
Handspring announces it is filing for Chapter 11 bankruptcy protection. A lack of new products, poor quality control, and bad investment of its resources in Treo, have caused Handspring to seek protection from its creditors. Rumor has it that Palm is not too far behind. In related news, Sony announced their newest model of the month, the paper-thin T600015...

RE: handspring is gonna be dead

I.M. Anonymous @ 1/15/2002 7:19:09 PM #

YES IT WILL BE DEAD ALONG WITH THE PALM OS.
POCKET PC OS IS THE FUTURE.

RE: handspring is gonna be dead

I.M. Anonymous @ 1/15/2002 7:42:59 PM #

Handspring cannot continue to bleed red. They have been in business for 2 years and havent turned a profit.

RE: handspring is gonna be dead

I.M. Anonymous @ 1/15/2002 7:47:35 PM #

"Ms. Dubinsky predicted that her company would be profitable by June. Since that announcement, Handspring's stock has gained steadily, closing up a bit today at $7.78. "

Sounds like a "pro-Handspring" news report.

Um, Palms stock was up 8% to Handsprings 1% after the announcement.

RE: handspring is gonna be dead

I.M. Anonymous @ 1/15/2002 9:38:02 PM #

Companies can post a loss 3 years in a row consequtively. Sometimes this is part of the plan to obtain the assets they need to sustain long-term profits. Initial business startup costs are typically high. A short term loss is not a bad thing, necessarily and obviously Handspring has a plan for becoming profitable in it's 3rd year of business, it's called the TREO and WILL be a succes.

As for the Pocket PC idiot who claims the death of Handspring, ask yourself this question:

"Where's the Pocket PC Phone? Ever heard of one? Wonder Why?"

Answer:
Due to the constant lockups and blue screens, it just can't make it out of the labs. Please have a seat now Mr. PPC. In the meantime, we'll be using our TREO's and VisorPhones for something besides playing solitare and rebooting ;)

RE: handspring is gonna be dead

I.M. Anonymous @ 1/16/2002 8:24:08 AM #

Thank you folks.
This is exactly the interaction that looking for.

RE: handspring is gonna be dead

Ed @ 1/16/2002 9:25:38 AM #

> Sounds like a "pro-Handspring" news report.

Handspring's stock has gained close to $2 since Dubinsky made her comment in early December. That's moving up about 25%.

---
News Editor

HandSpring Understands

I.M. Anonymous @ 1/15/2002 5:52:26 PM #

HandSpring is the only company that understands that wireless
is the FUTURE. Before much longer, all handheld
computers
will be wireless. ALL. They are on the forefront of making this
happen and are going to leave the competition eating its dust.

RE: HandSpring Understands

I.M. Anonymous @ 1/15/2002 6:29:06 PM #

absolutely!!! handspring is on the mark

RE: HandSpring Understands

Scott @ 1/15/2002 6:57:18 PM #

Oh yeah. They're the only one's that get it. I guess that's why Palm introduced the Palm VII in '99. The web clipping concept is a sound one, yet Hawkins decided to ignore it as he didn't seem to want to accept that Palm, Inc. could possibly add anything worthwhile. Furthermore, he hobbled his devices (and the Palm OS platform) by not incorporating flash ROM.

His Treo is a neat little device. But the price is too high and GSM coverage is still pretty bad in the US (Releasing it overseas first is a smart move). I also don't think there will be mass acceptance of a phone which lacks a phone keypad.

Scott

all?

I.M. Anonymous @ 1/15/2002 7:00:54 PM #

What about the little old granny or the 9 year old that just wants to keep track of their friends and their schedule? Do they NEED wireless connectivity?

I think not.

Willie G.

palminsider@yahoo.com

HandSpring???

I.M. Anonymous @ 1/15/2002 7:31:07 PM #

Only Handspring????? So Nokia, Samsung, Sony Ericsson are they all dead? What abt Microsoft smartphone attempt or maybe attempts if they fail the first time. HS was ahead of many initially, it is the staying power that counts. While HS is making Treo, you think those company above are sleeping??

RE: HandSpring Understands

I.M. Anonymous @ 1/15/2002 7:45:56 PM #

Some don't need wireless. Others don't want it. I don't want it if it cost too much. As for the little old granny, I bet she's got a calendar hangin' on the wall on which she puts all critical "data."

JBH

RE: HandSpring Understands

I.M. Anonymous @ 1/15/2002 9:15:35 PM #

Why does "granny" need a PDA at all?? You people will argue about any stupid thing just to hear yourselves spew.

RE: HandSpring Understands

I.M. Anonymous @ 1/15/2002 9:27:20 PM #

Like they understood the need for a new expansion format ???

Handspring have announced the death of their PDA, which spells the death of the springboard.

Understand, I don't think so, just gutsy, and it will be interesting to see if they survive until xmas.

RE: HandSpring Understands

I.M. Anonymous @ 1/15/2002 10:13:48 PM #

When did Handspring announce the death of the Visor? Handspring will be making PDAs longer than SOny. I bet that Sony will be exiting the PDA when they realize that there money is best spent on products that they are actually making a profit from.

RE: HandSpring Understands

I.M. Anonymous @ 1/15/2002 11:36:43 PM #

LoL ...

"HandSpring is the only company that understands that wireless
is the FUTURE. Before much longer, all handheld computers"

hmm ..... actually the guy who invented the radio really understood that wireless is the FUTURE ..... O well that's a long time ago, but that's the earliest form of wireless.

Recently years many company started to make wireless phones (e.g. Nokia, Samsung, Sony, Ericsson, Motorola) hmm ....... O well .. I guess handspring is the only company that understands that wireless is the FUTURE.

RE: HandSpring Understands

I.M. Anonymous @ 1/16/2002 7:43:48 AM #

"When did Handspring announce the death of the Visor? Handspring will be making PDAs longer than SOny. I bet that Sony will be exiting the PDA when they realize that there money is best spent on products that they are actually making a profit from."

hehe ....... if I read this 8 hours ago, I might find it not funny, but now it's actually really funny.

Handspring to stop making organizers

I.M. Anonymous @ 1/15/2002 11:04:25 PM #

http://news.cnet.com/news/0-1006-200-8493273.html

death of springboard anyone !?

I.M. Anonymous @ 1/15/2002 11:28:43 PM #

"We are a company that is transitioning out of the organizer business and into the communicator business," Dubinsky said. "At some point, we will have transitioned out of the organizer business."

Oh well, it's just a mattr of time before handspring officially admits that.

RE: Handspring to stop making organizers

Ed @ 1/15/2002 11:57:19 PM #

I've got more information on this announcement in a new article here:
www.palminfocenter.com/view_Story.asp?ID=2833&MODE=FLAT
Please continue this discussion there.

Thanks.

---
News Editor

Dropped Win CE, took up Palm OS

I.M. Anonymous @ 8/3/2002 10:28:11 PM #

It is quite unfortunate to see that handhelds are taking such a beating. While the Pocket PC deserves merit for being a powerful device with very PC like functions, the Palm OS (and its hopefully faithful descendants) will continue to rule the roost.
The difference between the two units is just like between the Macintosh and the Wintel (PC) machines. While I loved the Mac (which by all FAIR accounts is still a more powerful raw computer than the PC) there was simply not enough software to compete. Plus, writing software for a Mac used to be harder (Thank Bill Gates for making Windows programming both tricky and wierd).
The Pocket PC development is much alike the Macintosh in this analogy. While a wonderfully luxurious unit to work with, its growth is limited as its software is both expensive and less plentiful than Palm. Palm OS is much easier to program and simple developers can create rich programs (with pda toolbox and hanDBase) without extensive programming knowledge. A PDA is all about mobile function and utilization. With the Visorphones and Treos, Palm 505s and the like, utilization is the key and that will win adherents. I have an older Windows CE unit and a newer Handspring with Visorphone. While I find the Windows CE hard to put down, I find my Visorphone easy to pick up. With its rich features, Palm will probably stay on top, but with Pocket PC nipping at its heels.