Reversing a long trend of financial loses, Palm Inc. has just announced that it made a profit during its most recent financial quarter. It reported a pro forma net income — which excludes the effects of amortization of intangible assets, separation costs, and restructuring charges — of $5.7 million, or 19 cents per share. Net income, as measured by generally accepted accounting principles (GAAP), for the quarter was $3.5 million, or 12 cents per share. Analysts were apparently blindsided; they had expected Palm to report a pro forma net loss of 15 cents per share.
Revenues were $265 million, up 54% over the previous quarter but down 9% compared with the same quarter last year. Eric Benhamou, Palm’s CEO, said strong sales of its Tungsten T and Zire handhelds, which were released during the quarter, brought about the revenue increase.
Buoyed by the good news, the price of Palm’s shares rose about 12% in today’s after-hours trading.
During the quarter, the Palm Solutions Group, which develops the company’s hardware, shipped approximately 1.4 million Palm branded handhelds, bringing cumulative shipments to more than 20 million. According to NPD, the Palm Solutions Group accounted for approximately 60% of the handhelds sold in U.S. retail during the week beginning November 24, the last week of the fiscal quarter and the Thanksgiving holiday week that initiates the holiday buying season.
In a conference call after the results were announced, Palm executives predicted that revenues for the current quarter will be between $230 million and $250 million, down from this quarter. Palm chief financial officer Judy Bruner said the company will post a “modest” pro forma net loss for the quarter. The first part of the year is typically the slowest for handheld sales.