Palm's financial loss widens, but less than expected
- — 26 June, 2009 09:02
Sales fell to $86.8 million in the fourth quarter ending May 31, but according to Bloomberg, analysts had estimated just over $80 million. The loss amounted to 40 cents a share, quite a bit less than the 66 cents expected by analysts, Bloomberg reported.
Just days after the end of the quarter, Palm released the Palm Pre smartphone, with its innovative webOS, betting the company's future on the new platform.
The net loss for the quarter was $105 million, or 78 cents per share, much higher than the $43.4 million lost in the same period last year. Both figures are for "net loss applicable to common shareholders."
The fiscal year results were pretty dismal as well. For 2009, revenues were $736 million, compared to just over $1.3 billion a year earlier. The 2009 revenue figure reflected shipments of over 2.4 million smartphones, a drop of 25% year to year.
The loss for the year was $753 million, a big increase compared to $111 million loss in 2008.
At least some of the decreases in shipments and revenues reflected the shift to the new webOS platform and the Pre, which Palm unveiled in January. It has scrapped its original PalmOS, though it still offers the Windows Mobile-based Treo smartphone line.
The touchscreen Pre received generally favorable reviews, especially for the way it implements multi-tasking in webOS, which enables several applications to run and interact at once. The phone, priced at $199 with rebates, is offered exclusively on Sprint.
It's been estimated that Palm has sold about 150,000 of the new smartphones in its opening days, and analysts expect it to be selling a couple of hundred thousand per month by late Fall. But that compares to over one million of the new iPhone 3GS in its first weekend of availability. Palm faces aggressive smartphone competition from both Apple and Research in Motion, which has been seeking to expand the appeal of BlackBerry brand smartphones to a much larger consumer market.
That hasn't stopped investors from bidding up the stock's price: from $3.30 a share in early January to just over $14.00 today. In after hours trading today, the stock rose to $15.93, a jump of nearly 14%.