Palm unable to deliver device, affects Q2 numbers

Palm on Thursday announced its preliminary second quarter financial results for the 2008 fiscal year, which ended November 30th, falling short of previous forecasts based in part on a failed "mystery" product launch. Palm expects earnings to sit between $345 to $350 million, close to $30 million short of its October 1st projections for the first quarter. Palm expects gross margin to be within 29.3- to 29.8-percent on a GAAP basis. The gross margin reflects an as-of-yet unforeseen increase in warranty repairs over the course of the quarter, partly due to higher-than-expected shipments of Palm's new Centro smartphone, and a delay in product shipment.

The company's operating expenses are estimated to be in the range of $146 to $149 million, GAAP. Palm's loss-per-diluted share will range from $(0.22) to $(0.24) GAAP, with the provided figures based off of an estimated 40-percent effective tax rate, although figures will most likely vary as Palm releases final statistics.

“We are disappointed that we did not get a key product certified for delivery in the quarter, but we are focused on realizing the long-term benefits and opportunities that inspired our transaction with Elevation Partners," said Ed Colligan, Palm CEO. "We are pleased with recent improvements in our product delivery engine, the early success of Palm Centro, and the significant progress we’ve made on our strategic platform.”

Full financial results will be posted on Tuesday, December 18th, at the close of the market, 1:00PM Pacific Standard Time, with a conference call following at 1:30PM.

Filed under: industry
Other story tags: Palm, financial, earnings, preliminary, mystery product