Palm Posts Loss, Announces Stock Offering
Perhaps Palm really does have the “special sauce” needed to attain smart phone leadership, as RBC Capital Markets analyst Mike Abramsky recently claimed. Reporting first-quarter results this afternoon, the company posted a narrower-than-expected loss and announced plans for a common-stock offering of 16 million shares.
Excluding charges related to stock options and other items, Palm (PALM) said net losses were $13.6 million, or 10 cents a share, for the recent period. Revenue slipped to $68 million from $366.9 million in the same period last year. Excluding revenue deferred from sales of the company’s new Pre handset, Palm said adjusted revenue would have been $360.7 million. Analysts had expected the company to turn in a loss of 24 cents a share on sales of $291 million.
Palm shipped a total of 823,000 smart phone units during the quarter, up 134 percent over the fourth quarter of fiscal year 2009, but down 30 percent year over year. Smart phone sell-through for the quarter was 810,000 units, up 76 percent from the fourth quarter of fiscal year 2009 and down 21 percent year over year.
Speaking to analysts Thursday afternoon, Palm execs claimed that “the vast majority of new sales” for the quarter were generated by the Pre. But they declined to separate Pre sales from those of other handsets.
Skeptics will no doubt look at this and conclude that Palm didn’t meet expectations for Pre shipments of about 520,000. That, or the company is still selling a hell of a lot of Centros.
“We’re making significant progress with Palm’s transformation, and our culture of innovation is stronger than ever,” said Jon Rubinstein, chairman and chief executive officer. “We’re launching more great Palm webOS products with more carriers, and turning our sights toward growth.”
A few more Jon Rubinstein remarks from the earnings call:
On additional form factors:
I’m a big believer in families of products, and we’ll continue to evolve the line in the future and have a family of products for webOS.
On Carrier Customization:
We don’t really talk about our carrier agreements.
On Pre sales:
Sell-in and sell-through…the vast majority of new sales…relate to the Pre.
On the Pixi cannibalizing Pre sales:
The Pixi is a more cost-effective offering, so yes we expect some people might come into the store looking to buy a Pre and end up with a Pixi. But others might come in looking for a Pixi and end up with a Pre. As I said, we’re big believers in families of products. We’re happy to have two webOS products on the market.
On carrier diversification:
Sprint did a phenomenal launch with the Pre. They invested heavily in advertising….We’re looking forward to launching the Pixi with them as well. We don’t talk about our roadmap, but we’ll have more carriers and more products in the future.
On Motorola’s new Motoblur service:
We don’t really know much about it. To build really great consumer products, you have to own the OS and services. And the fact that we have webOS as our asset is really important.