Palm profits surpass Street 'spectations

Palm Computing yesterday showed off its first set of financial results as a public company - though for most of the reported quarter, the third of fiscal 1999, it remained a 3Com subsidiary. For the three months to 25 February, the company made $15.5 million, up from the same period last year's $8.7 million, on revenues up to $272.3 million from $125.9 million. The latest figures represent year-on-year growth of 78 per cent and 116.3 per cent, respectively. That profit figure comes before one-off items are taken into consideration - when they have been Palm's income for the quarter falls to $10.9 million. The exceptional items cover separation costs and the purchase of in-process technology. Even at that level, Palm's profits amount to two cents a share, double the figure Wall Street analysts had been expecting. Next quarter's numbers will be better. The company is anticipating sales in the region of $280-295 million, though it pointed out that component shortages - LCD displays and Flash memory, in particular; apparently these are all being grabbed by cellphone vendors - could impact margin growth. On the positive side, the company now has a $1.17 billion war chest, thanks to the IPO, which took place after Q3 was complete. Palm didn't say how many machines it shipped during the quarter - though it did say it has now shipped over six million devices in total - or how its sales break down between hardware and licensing revenue. ® Related Stories 3Com readies Palm-beating Net access box Apple movie marketeer joins Palm Colour Palm VII due August