Palm posts loss for Q1

The Palm not quicker than the i?

By Austin Modine in Mountain View • Get more from this author

Posted in Financial News, 1st October 2007 21:59 GMT

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Sluggish smartphone sales matched with increased spending made Palm swing a small loss during the first quarter.

In the three months ended August 31, Palm posted a net loss of $841,000, on revenue up 1 per cent to $360.8m. In the same period last year, income was $16.5m on revenue of $355.8m.

Treo sales were at 689,000 units for the quarter, up 21 per cent from a year ago. The smartphones contributed revenue of $302.2m, up 12 year-over-year.

Palm's operating income was a loss of $4.5m, compared with a gain of $23.4m in Q2 07.

Excluding one-time items such as $5.1m in stock-based compensation expenses, $6.6m in restructuring charges and $5m patent acquisition costs, net income would have been $9.7m. Operating costs such as advertising and R&D rose about a quarter from a year ago.

Palm has ramped up product development and marketing as the Treo struggles in fierce competition from rival devices such as the BlackBerry and iPhone. The company also recently killed the Foleo, a sub-notebook "companion" for the Treo before shipping any units to the public.

Palm forecasts Q2 sales of $370m-$380m — short of the $397m average expected by analysts. ®

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