PalmSource Reports Profitable Quarter, Job Cuts

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PalmSource has released the results for its most recent financial quarter.

Although the company turned a profit, this was the result of it selling its rights to the “Palm” trademark to palmOne. Without this $26.7 million, the company would have posted a loss.

Regular revenue for the quarter was $17.3 million, as compared to $17.7 million it reported in the same quarter of last year.

Net income on a GAAP basis was $18.3 million, or $1.12 per share. The company had a GAAP net loss of $2.9 million or 23 cents per share during the same period in 2004.

The number of Palm OS devices shipped during the quarter dropped. PalmSource’s licensees reported shipping approximately 1.1 million units during the quarter. This compares to approximately 1.4 million units shipped in the equivalent quarter last year.

The percentage of Palm OS devices that are smartphones rose significantly, from 18 percent to 37 percent.

Job Cuts

PalmSource plans to reduce its full-time head count by approximately 16 percent in the U.S. Over half of the job cuts were middle and senior management positions, including three senior vice presidents.

It expects annual salary savings of approximately $6.0 million in its current fiscal year related to these cuts.

Fiscal Year Results

This was also the end of PalmSource’s fiscal year.

It reported revenues $71.9 million over the last twelve months, as compared to $73.1 million in the prior year.

PalmSource’s GAAP net income was $19.5 million or $1.28 per share. During its previous fiscal year, the company had a net loss of $15.2 million or $1.40 per share.


Looking forward, in its current quarter, PalmSource expects its revenue to be in the range of $14.3 million to $14.8 million.

It is predicting a GAAP loss per share between 23 cents and 26 cents.

“While we still face significant challenges over the next several quarters, we continue to move forward with our development efforts in the broader mobile phone market,” said Patrick McVeigh, interim CEO. “We are committed to our transition to Linux-based platforms that deliver a great user experience.”

In a conference call after this announcement, McVeigh said that Palm OS for Linux is on schedule to be released to licensees during the first half of next year.

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