Palm posts larger 1Q loss, but beats Street view

Sep 17, 2009 By BARBARA ORTUTAY , AP Technology Writer
FILE - In this May 28, 2009 file photo, the Palm Pre is shown at Palm headquarters in Sunnyvale, Calif. Smart phone maker Palm Inc. on Thursday, Sept. 17, 2009 posted a wider loss for its fiscal first quarter as revenue dropped, but adjusted earnings and sales handily beat Wall Street's expectations. (AP Photo/Paul Sakuma, file)

(AP) -- Smart phone maker Palm Inc. on Thursday posted a wider fiscal first-quarter loss - its ninth in a row.

Adjusted results, however, handily beat Wall Street's forecast as the company shipped more of its new Pre devices than had been expected. But a disappointing second-quarter sales forecast and news of a planned stock offering sent shares lower in after-hours trading.

For the three months ended Aug. 28, Sunnyvale, Calif.-based Palm posted a loss after paying preferred dividends of $164.5 million, or $1.17 per share, compared with a loss of $41.9 million, or 39 cents per share, in the same period a year earlier.

Excluding one-time items, however, the company posted a much smaller loss of $13.6 million, or 10 cents per share, in the latest quarter. That easily beat analysts' forecast for a loss of 24 cents per share, according to a Thomson Reuters poll.

Revenue tumbled to $68 million from $366.9 million, largely because Palm deferred revenue from products that run its new WebOS operating system - namely the Pre - to later periods. But adjusted sales, which include deferred Pre revenue, totaled $360.7 million - also beating analysts' $297.7 million average estimate.

"We're making significant progress with Palm's transformation, and our culture of innovation is stronger than ever. We're launching more great Palm WebOS products with more carriers, and turning our sights toward growth," said Jon Rubinstein, chairman and CEO, in a statement.

Palm, whose business had been struggling amid competition in the smart phone market from BlackBerry maker Ltd., and Apple Inc.'s , revamped its product line with the Pre's launch in June. And it is launching a lighter, cheaper handset called the Pixi for the holidays.

The company shipped 823,000 smart phone units during the quarter, well above the 700,000 that CL King & Associates analyst Lawrence Harris estimated that Palm would ship. The company didn't break out how many of those were Pre devices. While the company's shipments are down 30 percent year-over-year, they more than doubled the amount shipped in the previous quarter.

For the current quarter, Palm forecast adjusted revenue in the range of $240 million and $270 million, below analysts' estimate of $344.4 million. However, it also forecast full-year adjusted revenue of $1.6 billion to $1.8 billion - which would top analysts' current average estimate of $1.57 billion.

Kaufman Bros. analyst Shaw Wu called Palm's forecast "a little confusing," since the company expects revenue to decline sequentially even though it is launching a new product and the holidays are coming up.

Wu, who has a "Hold" rating on Palm's shares, also said that Palm's cash burn during the quarter was "somewhat disturbing." The company went through more than $42 million in cash, ending the quarter with about $110 million in cash and cash equivalents.

Separately, the company said it plans to offer about 16 million of its shares to shore up its balance sheet. It will use the proceeds for working capital and general corporate purposes. Venture capital firm Elevation Partners, which already owns a stake in Palm, plans to buy $35 million of Palm's shares in the sale, at the public offering price.

Shares of Palm fell 32 cents, or 2.2 percent, to $14.12 in after-hours trading. The stock had closed earlier down 22 cents at $14.44.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Alibaba steals Yahoo's thunder ahead of IPO

add to favorites email to friend print save as pdf

Related Stories

Adobe 1Q profit, sales drop, squeezed by downturn

Mar 17, 2009

(AP) -- Adobe Systems Inc., the company behind the popular Photoshop software, posted a decline in fiscal first-quarter profit and sales Tuesday, squeezed by the economic downturn.

EA 1Q loss widens but results surpass expectations

Aug 04, 2009

(AP) -- Lower revenue from packaged video games amid a seasonal slump for the industry gave Electronic Arts Inc. a larger net loss in its fiscal first quarter. But investors cheered as its adjusted results ...

RIM 1Q profit tops view, shares wobble on outlook

Jun 19, 2009

(AP) -- BlackBerry maker Research in Motion Ltd. on Thursday reported a better-than-expected 33 percent jump in first-quarter profit as the company continues to boost market share among non-corporate customers.

EA posts smaller 4Q loss as costs decline

May 05, 2009

(AP) -- Video game publisher Electronic Arts Inc. posted a smaller net loss Tuesday for its fiscal fourth quarter as it further slashed costs in a quarter that had fewer hit game launches.

Soft PC sales send Microsoft profit down 29 pct

Jul 23, 2009

(AP) -- Microsoft Corp. said Thursday its profit in the last quarter plunged 29 percent because of weak computer sales, ending a fiscal year in which the software maker's revenue fell for the first time since ...

Texas Instruments 2Q profit falls 56 percent

Jul 20, 2009

(AP) -- Chip maker Texas Instruments says its second-quarter earnings fell 56 percent from a year ago, clipped by a weak economy that the company expects will "take some time" to strengthen.

Recommended for you

New US-Spanish firm says targets rich mobile ad market

4 hours ago

Spanish telecoms firm Telefonica and US investment giant Blackstone launched a mobile telephone advertising venture on Wednesday, challenging internet giants such as Google and Facebook in a multi-billion-dollar ...

Technip, Heerema win third giant Angolan oil contract

7 hours ago

The ultra-deep Angolan offshore oil project called Kaombo generated the third huge contract in three days on Wednesday when French group Total picked two firms to carry out underwater engineering worth $3.5 billion.

Yahoo sees signs of growth in 'core' (Update)

22 hours ago

Yahoo reported a stronger-than-expected first-quarter profit Tuesday, results hailed by chief executive Marissa Mayer as showing growth in the Web giant's "core" business.

User comments : 0

More news stories

Quantenna promises 10-gigabit Wi-Fi by next year

( —Quantenna Communications has announced that it has plans for releasing a chipset that will be capable of delivering 10Gbps WiFi to/from routers, bridges and computers by sometime next year. ...

Unlocking secrets of new solar material

( —A new solar material that has the same crystal structure as a mineral first found in the Ural Mountains in 1839 is shooting up the efficiency charts faster than almost anything researchers have ...

Floating nuclear plants could ride out tsunamis

When an earthquake and tsunami struck the Fukushima Daiichi nuclear plant complex in 2011, neither the quake nor the inundation caused the ensuing contamination. Rather, it was the aftereffects—specifically, ...

Patent talk: Google sharpens contact lens vision

( —A report from Patent Bolt brings us one step closer to what Google may have in mind in developing smart contact lenses. According to the discussion Google is interested in the concept of contact ...

Meteorites yield clues to Martian early atmosphere

( —Geologists who analyzed 40 meteorites that fell to Earth from Mars unlocked secrets of the Martian atmosphere hidden in the chemical signatures of these ancient rocks. Their study, published ...