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Technology Stocks : PALM - The rebirth of Palm Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Mang Cheng who wrote (3367)	1/12/2001 8:49:08 PM
From: Tom R. Clarksburg	Read Replies (1) \| Respond to of 6784

TO ALL: My suspicions for relatively sedate Revenue # for the 2nd quarter 2001 are realized. My own model had revenues on the previous November quarter at $602.3 million. Therefore, I would imagine the reason the stock took such hit after that quarterly report that was WITHIN the COMPANY's guidance of ($500M - 530M),is that most investors, including some institutional, probably were expecting "blowout" revenues and EPS (probably over $600M in revenues and EPS of .07-.09 such as I was). I came to that figure based on some simple extrapolations from the 1st Q and some statistical methods. But in general, The bigest and simplest reason for the higher revenues is because: 1) the previous 2 forward guidances from PALM were very conservative, and the actual results easily beat the management estimates and, 2) In my previous 2 talks with Judy Bruner (CFO), she mentioned that the $400million revenue they did in the 1st Q , could have been over $500M had they not been so PARTS CONSTRAINED! 3) These statements were also reiterated by Andy Neff, the Bear Stearns analyst covering PALM, in a teleconference sponsored by Bear Stearns back in October/2000. Therefore, if they did $400M in a seasonally slow quarter such as the 1st Q with the demand for over $500M worth of product, then PALM should easily be able to do $600M-700M in the HOLIDAY SEASON 2nd Quarter(2nd Q). Now, I know that they would still suffer shortages that would limit the full potential of this holiday season, so using statistical techniques, I projected the $ 602.3 million revenue figure in the 2Q, which I thought was a "safe bet".-----so did probably many other institutional and private investors for that matter! Now, reading though the 10Q, I came across the reason those sales were not realized as I expected. In fact, during the 2Q teleconference neither JUDY nor Carl, mentioned this very important fact the that prevented the 2Q from surpassing my $600m number, here it is from the 2Q 10Q: "For example, in the second quarter of fiscal 2001, one of our third party manufacturers failed to order certain components on a timely basis,which may have limited our ability to further increase revenue from the prior quarter." Now, If I am correct, I would think that the third party mfr. mentioned above, would have corrected the problem in time to provide that missed business for the current 3rd quarter (ending February 28, 2001). Thus the reason, I believe Carl and Judy mentioned in the 2Q conference call, that they expect shortage problems to be "substantially alleviated" by the February-March period. Lets hope that this quarter's forward guidance can be easily surpassed and therefored give us a much needed pop after 3Q earnings are announced in March. Good luck to all longs PS I hope I was not too wordy here :( regards TOM