Palm Reports Preliminary Q2 FY09 Financial Results
Palm Inc. today released its preliminary results for its second quarter of fiscal year 2009, which ended Nov. 28, 2008. In short, the news is pretty brutal with Palm's total revenue experiencing a massive contraction during the past couple of months. Revenues dropped nearly 45% from the same quarter last year, and could see a decline of as much as 48% from the previous quarter.
Palm places the blame on its "maturing" product line and "unprecedented dynamics in the global markets" given the current economic meltdown. The company vows to reign in costs even further and goes on to detail some of its latest cost-savings initiatives in the accompanying press release.
The Press Release is as follows:
Palm Reports Preliminary Q2 FY09 Results
Palm Implements Programs To Reduce Operating Expenses by 20% by Q4 FY09
SUNNYVALE, Calif., Dec 01, 2008 (BUSINESS WIRE) - Palm, Inc. (NASDAQ: PALM) today reported preliminary results for its second quarter of fiscal year 2009, which ended Nov. 28, 2008.
The company announced that it expects to record revenues for Q2 fiscal year 2009 in the range of $190 million to $195 million. The revenue decline vs. the company's Q1 fiscal year 2009 and Q2 fiscal year 2008 is a result of reduced demand for maturing smartphone and handheld products. The company stated that while it had expected these factors to pressure revenue in its November 2008 and February 2009 quarters, the difficult economic environment has greatly intensified the negative impact on product sales.
"We are seeing unprecedented dynamics in the global markets as economic uncertainty hampers demand for consumer products," said Ed Colligan, Palm's president and chief executive officer. "In order to ensure Palm's long-term success during these uncertain times, we're taking several steps to significantly reduce our cost structure. These measures will help us navigate this difficult period while launching our next-generation products as planned."
The company is currently implementing several cost-savings initiatives, including reducing its U.S. work force, consolidating its European operations, and shifting responsibility for Asia Pacific sales, marketing and administrative support to its U.S. offices. The company expects that by Q4 fiscal year 2009, these actions and other cost-savings initiatives will reduce quarterly operating expenses by approximately $20 million vs. Q1 fiscal year 2009 levels.
The restructuring charges associated with these and other measures will be recorded as expenses are incurred. In Q2 fiscal year 2009, these charges are expected to total between $7 million and $9 million. Second quarter operating expenses, which will include these charges, are expected to be in line with what the company recorded in Q1 fiscal year 2009.
Palm also announced that it expects its Q2 fiscal year 2009 gross margin as a percent of revenue to be between 18 percent and 19 percent, after accounting for the impact of a charge for inventory component purchase commitments. This charge is expected to be in the range of $10 million to $15 million. The company also expects its cash and short-term investments balance to be between $210 million and $220 million at the end of its second quarter.
Separately, Palm stated that in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," it expects to record a valuation allowance on its U.S. deferred tax assets of approximately $400 million during the quarter. The increase in the valuation allowance does not reflect a change in Palm's outlook, nor will it alter Palm's ability to utilize the underlying net operating loss carry forwards.
Palm will report its complete second quarter fiscal year 2009 financial results on Thursday, Dec. 18, 2008 and will host a conference call to review the complete financial results beginning at 1:30 p.m. PT / 4:30 p.m. ET.
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Should make for an interesting conference call
RE: Should make for an interesting conference call
Just bought a cradle for my TX that I can use at work, and I'm thinking about picking up a backup unit for when this one dies. Either that, or I'm going to pull my Vx out of the closet and party like it's 1999.
Still have the Stowaway keyboard to use with the Vx, too. Probably needs a new battery though.
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PalmPilot Pro (1997) -> III (1998) -> Vx (1999) -> m500 (2001) -> m515 (2002) -> Tx (2007)
RE: Should make for an interesting conference call
You got to know when to hold 'em, know when to fold 'em, know when to walk away, know when to run.
-Kenny Rogers
The last known classic PDA user.
RE: Should make for an interesting conference call
>Just bought a cradle for my TX that I can use at work, and I'm thinking about picking up a backup unit for when this one dies.
stop being a walking anachronism and throw out the pda and welcome to 2003.
RE: Should make for an interesting conference call
The last known classic PDA user.
RE: Should make for an interesting conference call
By the time Palm burns through the rest of the Crayola 64 palette maybe we'll get a leak about Nova from them. Crossing my fingers.....
Paying my annual PDA update tax to Palm since 1997.
RE: Should make for an interesting conference call
I wear bow ties and braces, and write with a fountain pen. Anachronism is a feature, not a bug.
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PalmPilot Pro (1997) -> III (1998) -> Vx (1999) -> m500 (2001) -> m515 (2002) -> Tx (2007)
And then there's Nokia
After all this buildup, I expect to have a Great Big Laugh.
RE: And then there's Nokia
RE: And then there's Nokia
Bueller? Bueller? Anyone know EuroTime?
RE: And then there's Nokia
Palm: On track to become a historical footnote
December 1st, 2008
Palm: On track to become a historical footnote
Posted by Sam Diaz @ 2:38 pm
Remember when Palm - maker of the Pilot and Tungsten PDAs and later the Treo smartphone - was the dominant player in the handheld device business? Today, it's a completely different landscape. Apple's iPhone has recently dominated the smartphone space. RIM is making a big push with the launch of consumer-friendly versions of the Blackberry. And Google has now entered the space with its Android operating system and the G1 device for T-Mobile. For Palm, pretty much a minor player these days, the future doesn't look so hot.
RE: Palm: On track to become a historical footnote
Of course, CR have always seemed to have an irrational bias towards WinMo-based phones...
RE: Palm: On track to become a historical footnote
Even CR says the iPhone is still mostly inferior to the PalmOS Treo, but if Palm gives them a few more years maybe Apple can finally implement a real keyboard, add some buttons and beef up the OS so Palm can finally die in their sleep.
Paying my annual PDA update tax to Palm since 1997.
Selling at cost?
Paying my annual PDA update tax to Palm since 1997.
What are all these vultures doing here?
Man I hope they live long enough to release Nova. And I agree, some kind of firm announcement this side of 2009 would be heartening.
RE: What are all these vultures doing here?
Not sales, but revenue.
- http://discussion.treocentral.com/showpost.php?p=1528073&postcount=146
Giggle.
RE: What are all these vultures doing here?
You have until the 15th, Palm
If you won't do it here at PIC, drop it into my email.
http://mikecane2008.wordpress.com/about/
If you impress ME, you know you have something.
If not, Ta-Ta.
RE: You have until the 15th, Palm
> 1) company makes blunders
> 2) EP says "oh, we're very happy with progress
> 3) new product underwraps, unseen, but EP very happy with progress
> 4) launch phones with no carriers
> 5) sales fall
> 6) share price drops to below 1.00
> 7) company gets delisting notice
> 8) EP says, hey, let's not mess with the exchange anymore,
> with price in the pennies, we'll take 'em private
> 9) well whaddya know...nova has successful launch, new game
> stopper products hit the street EP hugely rich
> 10) shareholders screwed
- http://tinyurl.com/palmsinister
RE: You have until the 15th, Palm
I'd really love nothing better than for Palm to ACTUALLY HAVE a frikkin MONSTAH BREAKTHROUGH HIT.
I'd be able to preserve a decade of frikkin Palmic data, for one.
For second, it'd make Apple move faster (it seems to be on Palm Time in regard to iPhone ...).
RE: You have until the 15th, Palm
Claus him/her/itself has appeared on the TreoCentral forums and is fielding questions from the community!!
http://discussion.treocentral.com/showpost.php?p=1528232&postcount=14
I recommend we bombard them with a list of THE most pressing questions facing the Palm OS community.
Pilot 1000->Pilot 5000->PalmPilot Pro->IIIe->Vx->m505->T|T->T|T2->T|C->T|T3->T|T5->Zodiac 2->TX->Verizon Treo 700P->Verizon Treo 755p
RE: You have until the 15th, Palm
I too would absolutely love to eat crow & wind up with mud on my face. I'd love to sit here and hear an endless stream of "I told you so"s from Tim & Jeff Kirvin & the Vampire Lestat.
Mike brings up a good point, one I've mentioned a few times in the past. Ever since Apple hit the ground running with the iPhone (or actually starting maybe with the previous round of MacBook/iMac/iPod refreshes), Apple's started trotting out new hardware with incremental improvements and moving at a glacier's pace to respond to the competition. Of course, since the entire industry seems utterly incapable of combining the power of WinMob + Apple UI & media savvy + RIM's corporate friendliness + Palm's PIM and 3rd party apps, what's the point of Apple exerting themselves? Just go out there and try to buy a high capacity HD-based MP3 player. There ARE none aside from that miserable iPod Classic!
As Gekko likes to say, "Death can come quickly to a market leader". Apple may be wishing they had a netbook or a larger tablet-style device up their sleeves in a year's time.
Pilot 1000->Pilot 5000->PalmPilot Pro->IIIe->Vx->m505->T|T->T|T2->T|C->T|T3->T|T5->Zodiac 2->TX->Verizon Treo 700P->Verizon Treo 755p
RE: You have until the 15th, Palm
> and is fielding questions from the community!!
I don't know if you noticed it or not, but he appeared HERE as well with the same sort of SPAM. I managed to get in a reply AS his SPAM was being removed...that reply was relocated to a different article's comments, however, and now replies to nothing!:
- http://www.palminfocenter.com/comments/7251/#146534
Game over
Noa could've been a hit a year ago perhaps, and definitely when Cobalt was stillborn. But the entire playing field has changed since then. The zen of Palm is but a distant memory. The days of simply making a more stable, modern Palm OS and riding on application compatibility is over.
What's the likelihood that with all this turmoil and false starts, Palm has actually been cooking up a trailblazing new GUI that will blow away everyone else, including the iPhone? Because that's what it would take for Nova to have any impact whatsoever.
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Palm just Big Time warned
- http://biz.yahoo.com/bw/081201/20081201006074.html?.v=1
[Palm didn't give MUCH numerical guidance so perhaps the word "warned" is a little out of place, but one item they DID discuss was gross margins - and they just missed those numbers rather thoroughly]