14 DAY TRIAL // Sunnyvale-based mobile phone maker Palm has recently announced the financial results for the third quarter of its financial year 2010, and reported total revenues on a GAAP basis of $349.9 million. At the same time, the company also revealed that its gross profit and gross margin were of $47.0 million and 13.4 percent, respectively. Overall, the handset vendor registered a net loss of $18.5 million, or 13 cents a share, and its stock went on a downwards road ever since.
According to Palm, the non-GAAP Adjusted Revenues in the time frame were of $366.0 million, while the non-GAAP Adjusted Gross Profit was of $63.5 million. At the same time, it also unveiled that the non-GAAP Adjusted Gross Margin was of 17.3 percent, and that it was impacted by a $45.3 million charge for reserves for inventory purchase commitments. 960,000 smartphone units were shipped in the quarter, a 23 percent increased compared to the previous quarter. However, Palm also noted that smartphone sell-through in the time frame was 408,000 units, a 29 percent quarterly decrease.
“Our recent underperformance has been very disappointing, but the potential for Palm remains strong,” said Jon Rubinstein, Palm chairman and chief executive officer. “The work we're doing to improve sales is having an impact, we're making great progress on future products, and we're looking forward to upcoming launches with new carrier partners. Most importantly, we have built a unique and highly differentiated platform in webOS, which will provide us with a considerable - and growing - advantage as we move forward.”
While Palm is still confident in its potential, analysts have already started to lose faith in it. Canaccord Adams technology analyst Peter Misek stated recently that the company seemed doomed, and that the estimated price target for Palm's shares was at the moment $0, compared to the previous $4 forecast. At the same time, Kaufman Bros’ Shaw Wu says that Palm's operating system might still have some value, but that the company might not be able to return to growth: “While we believe Palm has some value with its webOS…we are unsure of the company’s prospects as an ongoing concern.”