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Palm Q3 smartphones plunge 42% year-on-year

updated 09:15 pm EDT, Thu March 19, 2009

Palm shipments down

Palm on Thursday reported its third-quarter financial results, indicating smartphone shipments of just 482,000 units, down 42 percent year-over-year. Smartphone revenue was also hit hard, down 72 percent and contributing to the company's net loss of $98 million. "We're proceeding through a challenging transitional period, however our current results shouldn't overshadow the tremendous progress we've made against our strategic goals," said Ed Colligan, CEO and president. "We're poised to usher in a new era at Palm."

Palm last week announced plans to remarket stock in an attempt to stay afloat. The company increased the number of shares from 18.5 million to 23.1 million, potentially adding a total of $103.6 million in revenue to counter ongoing consumption of $95 million to $100 million per quarter.

The smartphone maker is relying on its upcoming Pre smartphone and webOS to bring the company back to profitability. The webOS platform will provide free software updates, allowing the associated revenues to be recognized on a subscription basis over the 24-month estimated product life.

RBC analyst Mike Abramsky recently upgraded his rating on Palm stock, explaining that the Pre makes the company a takeover target. He anticipates that the hardware and software combination will drive the company to outperform market expectations, potentially attracting a buyout that could be worth between $15 and $16 a share.



By Electronista Staff
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  1. Constable Odo

    Fresh-Faced Recruit

    Joined: Aug 2007

    0

    Palm doesn't have to

    worry at all with it's deferred revenue coming in and huge cash reserve.... Oh, that's right, Palm doesn't have either of those. They better start worrying right now that the Palm savior Pre is a hit right from the start. It's either swim or sink for Palm.

  1. dimmer

    Mac Enthusiast

    Joined: Feb 2006

    +2

    Ah well

    My palm is still providing excellent service. But my shoulder does get a little tired at times.

  1. gor3don

    Fresh-Faced Recruit

    Joined: Nov 2005

    +1

    new era

    Hopefully, for shareholders sake, the new era doesn't mean Chapter 11 or firesale.

    Will the Pre add to earnings enough to compensate for the almost 15% increase in the number of shares outstanding? At $15/share buyout, that's over $2B. A little optimistic for a product that isn't out yet. But then, aren't most analysts usually on the buy side?

  1. snork

    Fresh-Faced Recruit

    Joined: Feb 2008

    0

    Pre plus Sprint = :(

    It doesn't bode well for Palm is they are hoping for the Pre to be their saviour. Tying it to Sprint is a downer, I don't know a single person with Sprint service other than municipal and construction workers which use the Nextel side of things.

  1. misterdna

    Junior Member

    Joined: Aug 2004

    0

    snork

    I am a Treo 700p user and am very happy with my Sprint plan -- very fast data at a reasonable price. I'm all Mac, but think I might buy a Pre over an iPhone.

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