Palm Quarterly Revenues Up

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Palm, Inc. has released the results for its most recent financial quarter. Its revenues were up slightly, but not enough to make the company profitable.

For the quarter that ended August 29, Palm had revenues of $177.4 million, up 3.0 percent from the $172.3 million reported during the comparable quarter a year ago.

The company’s net loss, in accordance with generally accepted accounting principles (GAAP), was $21.7 million, or $0.74 per share. Included in this was $1.9 million spent on costs associated with the pending spin-off of PalmSource. Analysts had expected Palm to have losses between $0.77 and $.0.89 per share.

The company’s share price was up sharply today, rising $1.63 or 7.78%, to $22.57. However, it is down $0.67 in after-hours trading. These results were announced after regular trading had ended.

Palm is currently made up of two operating units — Palm Solutions Group and PalmSource. In the near future, PalmSource, which is responsible with developing and licensing the Palm OS, will split off as a separate company. The remaining part of Palm will be renamed palmOne and will make and sell handhelds. The company is also in the process of buying Handspring.

For the most recent financial quarter, the Palm SG had revenues of $168.6 million, and a loss of $16.5 million. During the same quarter a year ago, it had revenues of $164.7 million and a loss of $32.3 million.

The Palm SG shipped approximately 645,000 handhelds during this quarter, bringing the total number of Palm-branded handhelds shipped to date to 22.9 million.

PalmSource’s revenue last quarter was $17.1 million and it had a loss of $2.8 million. The same quarter in 2002 it had revenues of $15.0 million and a loss of $10.0 million.

Approximately 1.2 million Palm Powered handhelds were shipped in the quarter, bringing the total number shipped to date from all Palm OS licensees to 30.1 million.

“Palm Solutions Group and PalmSource demonstrated continued strong execution,” said Eric Benhamou, Palm, Inc. chairman and interim CEO. “Each business posted year-over-year revenue growth. We improved our gross margin, strengthened our balance sheet with an increase in our cash balance and managed our inventory to 20 turns. As we look to the near and medium term, we notice many indications of a new growth wave in the making for the mobile device industry.”

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