Palm's poor results raise renewed sales speculation

Palm's poor results raise renewed sales     speculation

Analysts are predicting the possible sale of Palm after it warned of falling revenue in the current quarter and revealed poor sell through numbers in its latest results.

Palm chief executive Jon Rubinstein called the company's performance deeply disappointing, adding Palm had launched a fightback strategy aimed at strengthening its sales and marketing strategies.

Although Palm Inc. reported a narrower quarterly loss in its latest results the Californian-based company continues to struggle against competition from bigger rivals.

Palm's revenue rose to £250.55 million in its fiscal third quarter ended Feb. 28, from £59.70 million a year ago. The company's net loss narrowed to £14.50 million, compared with a loss of to £64.57 million, a year earlier.

However Palm warned that revenue in the current quarter ending in late May would fall to less than £98.83 million. Although that is up from £74.59 million a year earlier, it is significantly below the £201.49 million projected by analysts.

Palm shares were down 14% at £3.20 in after-hours trading. The shares have fallen by more than half so far this year.

Chief financial officer Doug Jeffries called the current quarter an exceptional situation in which Palm has to reduce the buildup of excessive inventory. Palm said it shipped 960,000 smart phones in the latest quarter, but only sold 408,000 devices to consumers due to declining sales of its older devices and a slowdown after the holidays. That leaves about 552,000 phones in stores that the company still needs to sell.

Ben Wood, analyst at CCS Insight, said: 'Their sell through numbers are a bit of a shock there is quite a substantial inventory building up which means everything backs up.

'It is interesting to see management remains optimistic for the outlook with more handsets and broader distribution planned.'

He added: 'However there is lots of speculation about whether someone will buy Palm and that still cannot be ruled out.'

Palm did not dismiss the rumours this week. Asked by analysts if a sale was on the cards Rubinstein declined to comment beyond saying the board would look at any 'reasonable offer'.

Written by Mobile Today
Mobile Today


I sold 7 handsets of the Palm last week alone. With the right guidence proper training and sales ethics the Palm's qualities could out-weigh the iPhon ...
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