Palm Returns to Profitability… Sort Of

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Palm, Inc. has just announced that it turned a small profit last quarter, the first time this company has been able to say that in quite some time.

During the Sept.-Nov. period, Palm had revenue of $78.1 million, and if it weren’t for some new accounting rules this figure would be even higher. It recent begun following the GAAP accounting rule that requires it to not recognize revenue immediately, but instead defers it over the product’s estimated life. In the case of smartphones, this is two years.

If this rule weren’t in place, Palm’s revenue would have been $302 million, and it would have had a $77.3 million profit.

And, again because of complex accounting rules, Palm was hit with a non-cash charge of $396.7 million, so shareholders are actually seeing a loss of 37 cents per share. Still, this is a significant improvement over the 73 cents per share loss in the same quarter of last year.

Shipments and Sales
The company shipped a total of 783,000 smartphone units during the quarter, 5% less than it did the previous quarter, but a year-over-year increase of 41%.

It actually sold 573,000 units during this period, down 29% from the previous quarter and down 4% year-over-year.

“We’re still in the early stages of a long race, and we’re energized by the opportunity to compete in this exciting market,” said Jon Rubinstein, Palm’s chairman and chief executive officer. “We remain confident that Palm’s innovative product design capabilities, integrated cloud services and the differentiated and delightful Palm webOS experience will provide the foundation for our sustained success.”

Source: Palm

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