Palm Reports Q3 FY06 Results
Palm, Inc. today reported revenue of $388.5 million in its third quarter of fiscal year 2006, ended March 3, up 36 percent from the year-ago period.
"We delivered strong results this quarter, a result of solid execution against company objectives," said Ed Colligan, president and chief executive officer of Palm. "We extended our record of double-digit year-over-year revenue growth and profitability gains. Smartphone sell-through reported by our carrier partners more than doubled over the year-ago period, validating our strategic decision to support multiple open platforms and offer a choice of smartphones based on either Windows Mobile or Palm OS."
Net income in the third fiscal quarter was $29.9 million, or $0.28 per diluted share. Net income reflected the effect of a partial reversal of a deferred tax asset valuation allowance of approximately $13 million. This compares to net income for the third quarter of fiscal year 2005 of $4.4 million, or $0.04 per diluted share.
Net income for the quarter, on a non-GAAP basis, totaled $19.8 million, or $0.19 per diluted share, excluding the partial reversal of the company's valuation allowance against its deferred tax assets and amortization of intangible assets and deferred stock-based compensation, and adjusting the income-tax provision to 40 percent. This compares to non-GAAP net income in the third quarter of fiscal year 2005 of $10.6 million, or $0.10 per diluted share, which excluded employee separation costs and amortization of intangible assets and deferred stock-based compensation.
Highlights of the Quarter
During the third quarter of fiscal year 2006, Palm Inc accomplished the following:
- Shipped a total of 564,000 Treo smartphones. Treo sell-through reported by the company's carriers and other smartphone distributors was a record-high 569,000, up 102 percent from the year-ago period, reflecting strong demand for the Treo 650 and Treo 700w smartphones;
- Grew Palm's share of the U.S. converged smartphone/PDA market to 30 percent, up from 22 percent a year ago, according to Canalys. Palm's unit shipments grew by 111 percent compared to the overall market growth of 56 percent, according to Canalys;
- Began selling the company's first smartphone that uses the Microsoft Windows Mobile operating system. The Palm Treo 700w smartphone is the first of four new smartphones the company will introduce this calendar year;
- Delivered the first Treo smartphone built to take advantage of high-speed EV-DO (Evolution Data Optimized) radios. The Treo 700w runs on the Verizon Wireless network;
- Created additional breakthrough software differentiation by providing a Palm experience on the Windows Mobile operating system. Features include the ability to dial by name or image, perform a Google web search from the Today Screen, manage multiple voicemail-box commands with VCR-like icons, and decline an incoming phone call with a quick text message;
- Increased its carrier business for Treo 650 smartphones in Latin America with Telefonica/movistar in Argentina, Chile, Colombia and Venezuela; Vivo in Brazil; and CTI Movil in Argentina. In the United States, Cellular South introduced the Treo 650 to its customers, and Verizon Wireless began selling the Treo 700w in addition to the Treo 650; and
- Hired Ronald R. Rhodes as senior vice president of Global Operations, who brings to Palm 30 years' experience in operations and manufacturing, and promoted Roy Bedlow as vice president, Europe, Middle East and Africa.
Fourth Quarter Fiscal Year 2006 Outlook
Based on current trends, Palm provided its outlook for financial results in the fourth quarter of fiscal year 2006, ending June 2, 2006. At this time, the company expects the following:
- Revenue in the range of $400 million to $405 million;
- Gross margin between 33.5 percent and 33.7 percent;
- Operating expenses between $101 million and $103 million on a GAAP basis and between $100 million and $102 million on a non-GAAP basis; and
- Earnings per diluted share between $0.33 and $0.34 on a GAAP basis and between $0.22 and $0.23 on a non-GAAP basis, which excludes amortization of intangible assets and deferred stock-based compensation and reflects the difference between utilizing a 40 percent effective tax rate on a non-GAAP basis compared to an effective tax rate of approximately 7.5 percent to 8.5 percent on a GAAP basis.
Read PalmInfocenter's report of the Palm FY06 3Q Conference Call.
Source: Palm Inc Press Release
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RE: Sold 100 000 Treo 700w's
btw, check out the new Palm LifeDrive! 30GB!!
RE: Sold 100 000 Treo 700w's
RE: Sold 100 000 Treo 700w's
RE: Sold 100 000 Treo 700w's
Fish
Treo & PDA Sales Figures this quarter
treo sell thru was 569,000 up 102% y/y
510,000 Handhelds shipped.
Colligan again confirmed new Windows Mobile and Palm OS products are planned for release this year.
RE: Treo & PDA Sales Figures this quarter
RE: Treo & PDA Sales Figures this quarter
treo sell thru was 569,000 up 102% y/y
510,000 Handhelds shipped.
As a note for anyone trying to reconcile these numbers, the 74/26 ratio is revenue, not units. The Treos have a higher average selling price, so one Treo produces considerably more revenue than one E2 or TX.
POS sales static - WM to the rescue
HH SP Total
q3 04 1188 115 1303
q4 04 834 126 960
q1 05 766 179 945
q2 05 892 190 1082
q3 05 997 282 1279
q4 05 678 442 1120
q1 06 597 470 1067
q2 06 708 435 1143
q3 06 765 569 1334
Palm went WM to try and escape from this dead end. What Palm has not succeeded in doing yet is selling to people who did not even know they needed a smart handheld device. Unfortunately I have not heard them explore this theme at all. Unless they succeed in attacking this market they will have to rely on Microsoft to do this with their OS, and who knows if/when this will happen.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: POS sales static - WM to the rescue
RE: POS sales static - WM to the rescue
Thats not really relevant. At least they are attempting a new market. There are those who say OS does not matter, but obviously they do not know the POS community. At least Palm is now trying to access another market.
I would never buy a WM Treo with only 32 MB SDRAM, 10MB free after boot. This was something which was completely avoidable, yet it weights negatively every time a knowledgeable PPC user considers this device. Palm do not deserve to sell 700w's well if they continue to pull such cr*p.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: POS sales static - WM to the rescue
You have been cheerfully telling us (almost daily) over the last year or so that 'Palm is doomed' because of competition from WinCE/PPC/WinMob/whatever devices.
Now you seem to be saying that, on the one hand, Palm is surviving just because it has released a device with WinMob but, on the other hand, that device has pathetic technical specs.
It looks to me that you are struggling to read into these latest numbers some sort of angle you can use as part of your 'WM Advocate' advertising campaign.
RE: POS sales static - WM to the rescue
Correction - Palm is TRYING to survive (and grow) by releasing a WM device. But in pure Palm tradition it has pathetic specs.
They are not really doing much to justify their continuing existence. If their WM ploy does now work, it wont be due to the OS, but due to their penny-pinching. Their margin is +33% (+$150) for heavens sake, on devices they sell for $500 each ($289 million/564,000 Treo's), and they haven't got enough money for $10 of 64 RAM? Whats up with that?
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: POS sales static - WM to the rescue
RE: POS sales static - WM to the rescue
Ah Simony, why would I work so hard. I'm sure Ed Colligan would be happy to sit down with you and explain why WM is essential to the future of Palm.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: POS sales static - WM to the rescue
Let's assume that a 700p is released and let's assume that all carriers stock it together with the 700w. That would make an interesting experiment in what the market really wants, wouldn't it?
And the Palm (including Handspring) people have a track record with experiments like this. The first Treo came in two versions - one with GIA; one with a stupid keyboard. Customers preferred the stupid keyboard, so they dropped the GIA from all later Treos.
If Palm are smart, they will look at the comparative sales numbers and then decide what is the best thing to do.
You see, in business, it's best to try to be as flexible as possible and try minimise the number of 'bet the company' decisions that are needed.
RE: POS sales static - WM to the rescue
RE: POS sales static - WM to the rescue
It's interesting how you keep attacking Surur's opinions due to his OS preferences, and due to this alone.
He said that WM Treos leveraged Palm revenue. And also said that HE (himself, alone) would never by such a device with it's actual specs.
One of them was a discussion about business, the other about personal preferences. It can be done without being incoherent. What seems to be the problem here? :-
Ivan
RE: POS sales static - WM to the rescue
Simony, looking at those quarterly sales numbers, I have yet to see POS device cause an escape from the "million and a bit" sales figures. It appears to be all about substitution. The Treo 700p will be a success, and would probably outsell the Treo 700w, because its selling to the loyal POS market. It will however cause a corresponding drop in the TX sales, which Palm is OK with in the short term, as the margin on Treo's are higher. In the longer term however, Palm wishes to grow beyond the limited POS community. Their strategy for achieving this is to go WM, as you know from Ed's speeches on a number of occasions.
As a further direct example, they will be going WM for their European attack, because they think POS will actually hinder their attempts there.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: POS sales static - WM to the rescue
RE: POS sales static - WM to the rescue
Its hurts because it makes sense Simony. Thats the problem.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
No new handheld launches this spring?
RE: No new handheld launches this spring?
RE: No new handheld launches this spring?
POS losing out big time overseas
................Q3 06..........Q3 05
US..............310.8...80%....190.95...67%
International...77.7....20%....94.05....33%
Total...........388.5..........285
Not only did their international sales drop percentage wise, but they also sold $16 million less. Its obvious you cant get away with selling the same underpowered devices overseas as in the USA. I hope they realised this, and dont try their penny-pinching ways with the WM Hollywood Treo.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: POS losing out big time overseas
;o)
RE: POS losing out big time overseas
Kultivator, you from UK, arnt you. Have you heard that t-mobile may finally offer flat rate unlimited data for only £7.50 on their web and walk package. Pity I dont see any POS Treo's in their line-up. Maybe they will add the new WM Hollywood in June however.
http://www.t-mobilepressoffice.co.uk/press/uk/2006/23-03-06-webnwalk.htm
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: POS losing out big time overseas
RE: POS losing out big time overseas
Thx Ryan for fixing it.
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...
RE: POS losing out big time overseas
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Sold 100 000 Treo 700w's
http://www.palm.com/us/company/pr/news_feed_story.epl?reqid=797987
Today
So their marketshare is shrinking?
Also interestingly
http://www.slamblog.com/2006/03/all_time_treo_s.html
Q106 August-05 sellthrough 470,000
Q206 November-05 sellthrough 435,000
Q306 March-06 sellthrough 564,000
Assuming POS Treo sales to the true faithful were unaffected, does this mean they only sold 100 000 Treo 700w's? Will they regret their move?
Surur
They said I only argued for the sake of arguing, but after an hour I convinced them they were wrong...