HAND ( so/so$14 1/2) Revenues Jump 261%
By Alexei Oreskovic
Handheld computer maker Handspring met analysts' expectations for the third quarter, and recorded a strong 261 percent year-over-year increase in revenues, the company said Thursday.
The Mountain View, Calif.-based company said it lost $6.7 million (6 cents per share) in the third quarter, compared with 13 cents in the year-earlier period. Revenues for the quarter were $123.8 million due to strong demand for its Visor Platinum and Prism products, as well as its recently released Visor Edge.
"We are pleased with the results of the quarter, particularly our ability to achieve revenue growth in what is usually a sequentially down quarter in our industry," Handspring founder and CEO Donna Dubinsky said in a prepared statement. "We believe this growth demonstrates both acceptance of our new products as well as ongoing growth in the handheld computing sector in spite of an economic slowdown."
The news comes at a time of uncertainty in the handheld industry. In a meeting with analysts Wednesday, Palm announced that it is slashing prices on several of its older models in order to clear out an inventory pileup that could total $200 million.
But Handspring maintains that it did not expect Palm's price cuts to spark a price war. "We believe we will be able to retain our existing pricing strategy," Dubinsky said in a conference call with analysts. She cited the perceived value of Handspring's new product line, as well as its distinct Springboard expansion slot.
Still, Handspring acknowledged that until Palm's inventory situation is corrected, pricing uncertainty in the market will remain a factor. While Handspring reported third-quarter gross margins of 31.8 percent, up from 31.4 percent in the previous quarter, it warned that gross margins could drop to 30 percent to 31 percent for the June quarter.
Handspring said its outlook for overall demand for handheld computers remains positive but warned that the economic slowdown impact the company's near-term growth. Dubinsky said softness in demand is slight rather than precipitous, but revealingly, the company trimmed its revenue expectations for the calendar year by 5 percent.
The company also announced that it is working on a family of new devices with integrated wireless capabilities. Handspring pointed to various steps it has taken to that end, including the acquisition of Bluelark software, which it said will provide the building blocks for its wireless software, as well as its recent appointment of former FCC Chairman William Kennard to its board. The first of these wireless devices is expected to reach market by June 2002. |
