Palm, Inc. has reported that, during its most recent financial quarter, its revenue was up 25 percent from the year-ago period. This marks the ninth-consecutive quarter of year-over-year growth.
Its revenue of $342.2 million drove it to a net income of $18.2 million, or $0.35 per diluted share. This was slightly below the company’s net income from the same quarter a year ago, even though revenue was higher.
The company generated $48.5 million in cash and cash equivalents from operations in, bringing its total cash and investments balance to $411.3 million at quarter’s end.
“We’re pleased with the company’s performance during the quarter,” said Ed Colligan, Palm’s president and chief executive officer. “Treo smartphone sell-through was 470,000 units, which reflects an increase of more than 160 percent from the year-ago period. Our share in the handheld-computer market rose, and we’re excited about our overall product roadmap.”
Although sales of the company’s smartphones were up 163 percent, sales of its traditional handhelds fell 22 percent.
Palm executives predict that their company’s revenue during the current quarter will be between $435 million and $440 million.
Analysts had expected revenue to be about $450 million, and some are now wondering if — with sales of handhelds dropping — sales of smartphones alone can keep Palm profitable. Especially as Colligan has admitted that the Treo hasn’t taken off in Europe as much as the company had hoped.
If the company’s results for the quarter are as planned, it is likely that the deferred tax asset valuation allowance will be released. If this occurs, it would result in a one-time benefit to the tax provision of approximately $240 million to $250 million, the company’s effective tax rate would also change to 40 percent for the next three quarters.
Should the deferred tax asset valuation allowance be released as expected, Palm’s executives expect that earnings per share for the quarter will be in the $5.00 to $5.20 range.
If this doesn’t happen, earnings per share are expected to be between 55 cents and 60 cents.