Palm Pileup: Weak Smartphone Sales and a Gruesome Q4 Forecast
No surprise, following Palm’s (PALM) dismaying February warning: The earnings news today is grim, though a bit less so than some had feared.
The good news: For its third quarter, Palm reported a net loss of $18.5 million, or 13 cents a share, on revenue of $349.9 million. That’s nicely ahead of its recent guidance of $285 million to $310 million, but obviously well below the $424.7 million analysts had been expecting before the pre-announcement.
The bad news: While Palm shipped 960,000 smartphones during the quarter, the company sold only 408,000 of them. That’s about 30 percent less than it sold last quarter and significantly fewer than the 500,000-600,000 analysts were looking for. Palm has a lot of unsold inventory sitting around.
And then there was this: Looking ahead, the company said it fourth-quarter revenue will be less than $150 million. That’s about half what Wall Street was expecting. Pure ugliness.
“Our recent underperformance has been very disappointing, but the potential for Palm remains strong,” said Jon Rubinstein, Palm chairman and chief executive officer. “The work we’re doing to improve sales is having an impact, we’re making great progress on future products, and we’re looking forward to upcoming launches with new carrier partners. Most importantly, we have built a unique and highly differentiated platform in webOS, which will provide us with a considerable–and growing–advantage as we move forward.”
At $4.94, Palm shares are down more than 12 percent as I write this.
Notes from the earnings call:
- There are now over 2,000 apps in the Palm App Catalog.
- Handset sales are predominantly webOS.
- Rubinstein says Palm has been held back by “execution missteps.”
- Rubinstein declined to discuss speculation about a possible acquisition of the company
- Could Be Worse, Could Be Raining: Palm’s AT&T Launch Delayed?
- Could WebOS Licensing Be Palm’s Salvation?
- Palm’s Salvation? Less Push, More Pull.
- And if Palm’s Project JumpStart Doesn’t Work Out, There’s Always “Project Defibrillator”
- Double Face-Palm: Analysts React to Palm’s Lowered Guidance
- Time to Start Looking for a Buyer, Palm?
- 2010: Year of the Palm? Maybe Not…
- Analyst: Palm May Be Acquired in the Next Two Years