Palm beats estimates, offers grim forecast
By Richard Shim
Staff Writer, CNET News.com
March 27, 2001, 1:55 p.m. PT
Handheld maker Palm reported quarterly earnings Tuesday that narrowly beat analyst expectations, but offered a grim outlook for its current quarter.
Palm reported a profit of $9.3 million, or 2 cents per share, on revenue of $470.8 million, excluding amortization and goodwill charges. Analysts had been expecting a profit of 1 cent per share on revenue of about $473 million.
In the same quarter last year, the company reported a profit of $15.8 million, or 3 cents per share, excluding charges.
Despite beating estimates, Palm indicated that demand is dropping off. Revenue will come at $300 million to $315 million for the current quarter, Palm's fiscal fourth quarter. Palm reported revenue of $350 million for its fiscal fourth quarter last year.
Palm expects to report a loss of 8 cents per share for the current quarter. Cost-cutting measures are being imposed at 10 to 15 percent of operating costs.
The company will reduce its work force by 250 employees and contract workers. It will also postpone construction on its new corporate headquarters in San Jose, Calif. Work was scheduled to begin this month.
"Palm has recently begun to feel the effects of the deteriorating macro economic environment," CEO Carl Yankowski said in a statement, "resulting in a reduced incoming order rate amid signs of what appears to be a sector slowdown. Based on this, we believe that demand is approximately flat to the fourth quarter a year ago."
Including special charges, the Santa Clara, Calif.-based company earned $1.9 million, or just under 1 cent per share, in its fiscal third quarter, which ended March 2.
Palm shares closed up $1.06, or just over 7 percent, to close at $15.50 on Tuesday.
The leader in the personal digital assistant market reported a 112 percent increase in the number of handhelds sold in its third quarter over its second quarter, bringing the total to 13 million. |
