Palm troubles continue 44% profit drop
Palm’s troubles ongoing on Thursday as the organization published an income of $15.4 million for that 4th quarter, a 44 percent drop from the $27.two million mark twelve months earlier, despite strong sales of their Treo smartphone.
The organization reported revenue of $401.3 million for that quarter ending 1 June, lower slightly in the $403.a million it gained within the same quarter in the year 2006 as well as below Wall Street’s forecast of $406.six million, based on analysts polled by Thomson Financial.
The outcomes come just days after the organization faced whispers it might be acquired by rivals Motorola or Nokia. Rather, Palm elevated $325 million of additional money by selling a 25 percent stake of the organization to personal equity traders.
Palm is shifting its product portfolio from personal digital assistants (PDAs) to smartphones, that are much more popular and provide a possible for greater profit due to their greater cost tags. Previously quarter, Palm came 86 percent of their revenue from smartphone sales, an enormous swing for an organization that in 1996 came its entire revenue in the Palm Pilot PDA. Palm’s smartphone revenue of $344.two million for that quarter was up 14 percent in the same quarter in the year 2006.
“Our record Treo sell-through reflects strong basic principles within the core focus regions of our business,” stated Palm Chief executive officer Erectile dysfunction Colligan. “I am certain that in fiscal year 2008, increasingly more standard handset clients requires the abilities and simplicity of use of Palm smartphones, which aligns us well for future growth and profitability.”
Despite Colligan’s optimism, Palm’s smartphone sales didn’t help its results. Palm gained an income of $.15 per be part of the 4th quarter, matching analysts’ expectation of $.15 but arriving far underneath the $.25 it made last year.
Searching to return, the organization predicted revenue between $355 million and $365 million for that coming quarter, the very first duration of Palm’s fiscal 2008. If the organization meets the greater finish of goal, it might beat its mark of $355.8 million in revenue for that first quarter of 2007.
However, Palm might be depressed by alternation in its boardroom. Like a condition of purchasing a sizable share of the organization, an investment group Elevation Partners was adamant on installing a brand new chairman, former Apple v . p . Jon Rubinstein. Palm also elevated questions among traders in May if this released the Foleo, a miniature laptop meant to sell like a “smartphone companion.” That product rapidly faced critique that it is $599 cost was excessive which its ten-inch screen was too big.
Also on Thursday, Palm reported revenue of $1.56 billion for that full fiscal year 2007, lower 1 percent in the $1.58 billion it gained in the year 2006. Palm gained profit of $56.4 million for that year, far below its $336.two million profit in the year 2006, even though the 2006 figure incorporated a 1-time tax rebate of $219.5 million.