Palm revenues double – again • The Register

Palm revenues double – again

But PDA prices falling fast

By Tony Smith • Get more from this author

Posted in Business, 26th September 2000 08:54 GMT

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A jubilant Palm yesterday unveiled its latest quarterly fiscals, which saw its revenues double and profits beat Wall Street expectations.

For the three months to 1 September, Palm's revenues hit $401 million, up 127 per cent on the $176.5 million it recorded in sales of product and technology licences for the same period last year.

That revenue hike helped push the handheld computer company's operating profit to $23.9 million (four cents a share). According to First Call's Wall Street average, analysts were predicting a profit of two cents a share, which is what Palm made this time last year. Then, it recorded a profit of $10 million.

Factor in one-off charges, however, and Palm's latest profit figure falls to $17.3 million (three cents a share), up from $9.7 million last year.

During the most recent quarter, Palm shipped around 1.5 million handhelds, making for a grand total of 8.7 million devices shipped to date. The company reported that sales of the new, consumer-oriented m100 handheld were "brisk", but the addition of the low-cost device to Palm's line-up knocked the average price of its products down to $240 from $262 in July.

So, as the m100 takes off, Palm is going to have to work harder to sell even more machines if it's to continue doubling its revenue every quarter, as it has done over the last three three-month periods.

That said, increased sales plus the arrival of big-name partners and licensees - most notably Motorola, which announced a joint development programme with Palm yesterday, and Sony - could encourage more businesses keen to enter the PDA arena to license Palm's technology.

Palm's more-than-doubling of revenue will put pressure on another PalmOS licensee, Handspring, to come up with a more impressive figure. If it's to meet CIBC Oppenheimer analyst Thomas Sepenzis' predictions, that is. Last week, he said Handspring will see even greater revenue growth than Palm when it releases its own quarterly results later this week.

"While Palm is the market-share leader, we believe that Handspring will show the greatest revenue and (earnings) growth, and therefore believe it should be trading at a premium," he said. ®