John Paczkowski

Recent Posts by John Paczkowski

Time to Start Looking for a Buyer, Palm?

Pre_pythonSo much for Palm’s big recovery. This morning, the company lowered its fiscal-year revenue forecast and warned of a grotesque 30 percent shortfall in its current quarter.

Palm (PALM) expects third-quarter revenue to be between $285 million and $310 million–significantly less than the $425.4 million analysts had been expecting. As a result, revenue for the fiscal year will be “well below” the $1.6 billion to $1.8 billion the company had projected.

Damn. Puts a new spin on that Chinese New Year smartphone production respite we heard about earlier this month, doesn’t it?

Clearly, concerns about declining sales of the company’s webOS smartphones were well-founded. It now seems there’s a growing possibility they may not reach critical mass. Which is obviously worrisome because Palm has essentially bet the farm on them.

“Palm webOS is recognized as a groundbreaking platform that enables one of the best smartphone experiences available today, and our work to evolve the platform and bring industry-leading technology to market continues. However, driving broad consumer adoption of Palm products is taking longer than we anticipated,” Palm CEO Jon Rubinstein said in a statement. “Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products.”

Rubinstein’s reassurances have done little to temper investor disgust over the company’s news. At $6.68, Palm shares are down more than 17 percent as I write this.

Perhaps it’s time for Palm to start looking for a buyer, whether Nokia (NOK), Dell (DELL) or someone else. Not that these companies are interested. For Palm to be a good acquisition target, it needs to demonstrate viability, something it’s obviously having trouble doing.

Below, Palm’s press release detailing today’s ugly news.

Palm, Inc. (NASDAQ:PALM) today indicated that it expects that revenues for the third quarter of fiscal year 2010 will be in the range of $285 million to $310 million on a GAAP basis and in the range of $300 million to $320 million on a non-GAAP basis. Revenues for the quarter and full year are being impacted by slower than expected consumer adoption of the company’s products that has resulted in lower than expected order volumes from carriers and the deferral of orders to future periods. Accordingly, Palm expects fiscal year 2010 revenues to be well below its previously forecasted range of $1.6 billion to $1.8 billion. The company will provide more detail on its financial results during Palm’s third-quarter financial results conference call currently scheduled for Thursday, March 18.

“Palm webOS is recognized as a groundbreaking platform that enables one of the best smartphone experiences available today, and our work to evolve the platform and bring industry-leading technology to market continues. However, driving broad consumer adoption of Palm products is taking longer than we anticipated,” said Jon Rubinstein, chairman and chief executive officer. “Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products.”

The Company expects to close its third fiscal quarter with a cash, cash equivalents and short-term investments balance in excess of $500 million.


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Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus