PalmSource Turns a Profit, But Revenues Down

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PalmSource has just released the results of its most recent financial quarter.

The developer of the Palm OS had a profit of $597,000, or 5 cents per share on a fully-diluted basis.

However, it wasn’t all good news. PalmSource reported revenues of $21.6 million, as compared to revenues of $26.3 million for the same quarter of the prior year, a decrease of 18 percent. However, a more long-term view looks a bit better. Total revenues for its last three quarters were $55.5 million, just slightly below its revenues of $56.1 million for the same time period of its last fiscal year.

At the end of the quarter, PalmSource had cash, cash equivalents and restricted investments totaled up at $33.3 million.

This was a fairly significant quarter for PalmSource, as it released to licensees a new version of its operating system, Palm OS Cobalt (formerly called Palm OS 6).

This is PalmSource’s first complete quarter as a fully independent company since separating from Palm Inc. at the end of October, 2003.

A Look Ahead

For the current quarter, PalmSource estimates that its revenues will be roughly $17 million. Though this is down significantly from the current quarter, the company is typically paid by its licensees for handheld sold during the previous quarter. This means that last quarter’s revenues included licensing fees from the busy holiday shopping season.

Along with a decrease in revenue, PalmSource says it expects to have a net loss of $4 million to $7 million during this quarter.

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