PalmOne pockets a profit

But analysts want more

By John Oates • Get more from this author

Posted in Financial News, 21st September 2004 10:14 GMT

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PalmOne has pleased Wall Street with a set of results for the first quarter of fiscal 2005 ended 27 August 2004.

The handheld and smart phone maker turned over $273m, up 62 per cent from the $169m in the same period a year ago. The firm made a profit or net income of $19.6m, compared to a loss of $16.9m a year ago. This provided a profit per share of 48 cents, compared with analysts' predictions of around 20 cents per share.

Gross margin rose to 33.3 per cent compared to 28.1 per cent in the same quarter last year. Operating margin was 8.5 per cent. Inventory turns rose to 44 times compared to 21 times the year before.

PalmOne shipped 981,000 Zire, Tungsten and Treo devices in the quarter, taking total shipments to date to 27.4m.

Shares in palmOne initially rose but ended falling more than ten per cent because the company's outlook for the next quarter missed analyst expectations. The handheld maker expects earnings per share of between 46 and 50 cents per share, according to Reuters. But analysts had targeted earnings of 60 cents per share. palmOne said margins will under pressure in the run up to Christmas from increased spending on marketing and engineering. ®