Palm announces Q4 earnings -- it's not as bad as you think
By Joshua Topolsky 
posted Jun 27th 2008 9:31AM
posted Jun 27th 2008 9:31AM
Palm continued to flaunt its almost inexplicable boost in health in an earnings call yesterday. According to reports, honcho Ed Colligan boasted of a 29 percent gain in smartphone sales year-over-year, largely in part to the stellar performance of the company's budget-priced (with contract) Centro. In light of the recent negative outlook from investors, retail store closings, a constantly delayed OS update, and fierce competition, it's a pretty impressive feat to not only stay afloat, but manage some small victories. Now if they can just deliver on those OS and device promises we keep hearing about, they may stay in this game yet.[Via Palm Infocenter]
If it's not so bad, why is the stock down 10% today? Yeah, I though so. It's bad. How many quarters do they have left? I'd say 2 or 3 at the present pace.
Showing signs of slowly coming back. 2009 is going to be the real test for Palm!
They have plenty of juice in the tank. They just gave out a $9 dividend, they wouldn't have done that if bankrupcy was imminent (of course I'm sure bono wanted some cash bank). They're still selling more phones than ever, so they wont go under, even if they sell them at with a small margin. If theyre 2009 stuff gets delayed, the new o/s and devices, then they'll be done for.
Have to agree with Bob on this one. Palm is in all out survival mode until Nova explodes or implodes. They are getting squeezed in more directions than they can bear.
They are not "coming back". Certainly not with a Centro that will be free with rebates in 12 months. If past performance is indicative of future expectations at all, Palm cannot hope to produce compelling devices on the WinMob platform for long.
Nova's (Palm OS II) platform and surrounding devices is what they surely have the future star hitched to. If it's compelling, and they change their dismal record of hardware introduction, then they'll have a change. Drop that ball and investors had better head for the hills ASAP.
My ownership stake is one Treo and years of loyalty. If I owned shares of stock, I would be as nervous as a long tailed cat in a room full of rocking chairs!
25% lower sales figures than 1 year ago?
Single quarter loss of $43.4M?
http://www.reuters.com/article/marketsNews/idINN2637212820080627?rpc=44
Yet a $9 dividend? Is Enron doing their bookkeeping?
Colligan for Prez!
Face it people, the Centro with it's price point undercutting Blackberry's is a success.
The Centro is selling well, but it has very low profit margins. Think about it - it's almost identical to a Treo, which is at least double the price. So while Palm is selling more phones than before, they're making less money per phone - plus, the Centro has to be stealing some (more profitable) Treo sales. The Centro's ultra-low price was a last ditch effort to keep Palm afloat until its new OS. Godspeed, Treo 800/850 and Palm OS 6...
As any Wharton grad, or even a 1st semester community college kid, could tell you, price has no direct relationship to profit margin whatsoever. Who do you think you're foolin'? Is that really the best Palm apologistas can come up with? Completely unfounded speculation or explicit lies?
> retail store closings
Just so we're all on the same page, the original article on Palm's retail store closing was mostly incorrect. It said the Palm-branded stores in airports are going to close. These aren't actually owned by Palm, but by another company, and are alive and well. I was in one this week.
The stores that closed were a few that were in malls that never did all that well to begin with.
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Ed Hardy
www.brighthand.com