Palm Moves 823,000 Smartphones in Q1 FY 2010

Sunnyvale-based mobile phone maker Palm announced on Thursday its financial results for the first quarter of its fiscal year 2010, ended August 28, 2009, and posted revenues of $68.0 million for the time frame. At the same time, the company also announced that it managed to ship a number of 823,000 handsets in the period, which represents a 134 percent increase compared to the previous quarter.

Although the number of smartphones shipped in the quarter was higher when compared to the fourth quarter of the previous fiscal year, it marked a decline of 30 percent when compared to the same time frame a year ago. Palm also announced smartphone sell-through for the time frame of 810,000 units, representing a 76 percent increase on quarter and a 21 percent decrease year-on-year.

The handset maker also announced non-GAAP Adjusted Revenues of $360.7 million for the three-month period, as well as non-GAAP Adjusted Gross Profit of $100.6 million, and a non-GAAP Adjusted Gross Margin of 27.9 percent. On a GAAP basis, the company registered net loss of $164.5 million, or $1.17 per diluted common share. “We’re making significant progress with Palm’s transformation, and our culture of innovation is stronger than ever. We’re launching more great Palm webOS products with more carriers, and turning our sights toward growth,” said Jon Rubinstein, chairman and chief executive officer.

Other highlights from the company's announcement include a gross profit of $2.8 million, coupled with a gross margin of 4.1 percent. According to the company, “these results include the effects of subscription accounting applied to Palm webOS products as required by GAAP. In accordance with this methodology, revenues and direct cost of revenues for Palm webOS products (currently Palm Pre smartphone) are deferred and recognized over the product’s estimated economic life.”

Palm also noted that the second quarter of the fiscal year 2010 as well as its second half are expected to show that the company will turn to profitability. The phone maker plans new launches for the second quarter and expects its non-GAAP Adjusted Revenues for the time frame to be between $240 million and $270 million. In addition, it also stated that it intended to launch its products with more carriers in the second half of the year, a move that should drive its non-GAAP Adjusted Revenues for the entire fiscal year 2010 to up to $1.6 billion or $1.8 billion.