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Pre wasn't able to pull Palm out of the red in Q4 2009

Palm launched its new smartphone this month called the Pre. The device was the first webOS handset from Palm and the company has high hopes that the Pre will help it get back into the smartphone market after its previous handsets were losing their appeal to consumers.

It was apparently too late in the quarter for the Pre to help Palm's earnings look better. Palm announced its Q4 fiscal 2009 earnings (PDF) yesterday and reported a net loss of $105 million or 78 cents per diluted share. In 2008, the new loss for the same quarter was $43.4 million.

Palm doesn't get specific about how many Pre's were shipped during the quarter, but does say that it shipped 351,000 smartphones during Q4 for a 6% increase from Q3 fiscal 2009 and a year over year decline in shipments of 62%.

Smartphone sell-through for the quarter was 460,000 units, a decline of 5% from the previous quarter and a drop of 52% year-over-year. Total revenues for Palm for its fiscal 2009 year were $86.8 million with gross profit of $20.1 million and a gross margin of 23.1%. Palm points out that its GAAP accounting method defers and recognizes the revenues and cost of revenues for the Pre over the products estimates economic life.

“The launch of Palm webOS and Palm Pre was a major milestone in Palm’s transformation; we have now officially reentered the race,” said Jon Rubinstein, Palm’s chairman and chief executive officer. “We have more to accomplish, but the groundwork is laid for a very promising future here at Palm. Our senior management team is capable, motivated and focused on execution; there is a large group of developers waiting to build great applications for Palm webOS; and we have a new product pipeline that we think will set a standard for the industry.”

Palm reports that on a non-GAAP basis the net loss for the quarter was $53.4 million. Palm has $255.1 million in cash equivalent and short-term investments available at the end of the quarter.

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hmm?
By invidious on 6/27/2009 4:53:20 PM , Rating: 2
Is the 2nd quarter of the year really considered Q4 in the financial world? Or is that just a typo?




RE: hmm?
By Hare on 6/27/2009 5:09:56 PM , Rating: 1
We are not even past Q2 so I quess it most definately is a typo. It should be Q1 2009? For Q4 2008, the results would be very very late.


RE: hmm?
By giskard88 on 6/28/2009 7:24:23 AM , Rating: 5
are you even vaguely aware how a financial year works?


RE: hmm?
By mcnabney on 6/28/2009 6:03:37 PM , Rating: 2
Clearly not.

Sigh.

Should we tell them that even the US government doesn't align quarters with the calendar?


RE: hmm?
By Fireshade on 6/29/2009 11:42:07 AM , Rating: 3
Always such gloomy headlines... why not " Palm Reports $20M Profit for Fiscal 2009 " ?


That explains it
By djc208 on 6/26/2009 11:33:45 AM , Rating: 3
Probably why Palm kept the exclusivity deal short. Probably got a nice bit of help from Sprint but Verizon will be where they make the real cash.

Hopefully they follow through with their promises, it looks and sounds like they're just some spit and polish from a great OS. And with as much hate as people seem to have for AT&T the Pre probably only has to be 90% as good as the iPhone for people to dump it and run to Verizon.

Plus once it's on more than one network the networks will have to go back to competing on services and price, which benefits us.




RE: That explains it
By mmcdonalataocdotgov on 6/26/2009 11:58:57 AM , Rating: 2
I think they forgot they were competing with the Blackberry. When the BB came in and kicked them in the head like a mule, I think they got groggy, and by the time they shook it off and did anything about it, they thought it was the iPhone that must have knocked them out, and started competing with them. So too late to get back the corporate marketshare from BB, and not enough glam to get the gotta-hava-Apple spendthrifts.

Meanwhile Franklin-Covey is drinking cheap wine out of a paper bag in a refrigerator carton out by the interstate, and is saving a seat for Palm.


RE: That explains it
By Xenoterranos on 6/26/2009 3:42:15 PM , Rating: 2
"Meanwhile Franklin-Covey is drinking cheap wine out of a paper bag in a refrigerator carton out by the interstate, and is saving a seat for Palm. "

Ha! Awesome imagery. You win an internet!

(and for the nay-sayers, there's nothing wrong with a little boxed wine :P )


By psychobriggsy on 6/27/2009 2:50:32 PM , Rating: 3
Assuming that Palm keep on selling Pres, even on Sprint, and that they're making a decent profit on each device - not as much as Apple I imagine, but a good $200 maybe. That's a lot of revenue and profit coming into Palm in the near future. Of course due to GAAP they can't account for it all at once, but they'll be okay.

Of course, they'll need to keep on top of their game. They need to sell the Pre in other markets. They have to go up against some strong competition as well. However the software looks good, if young. Let's see where they are in a year.




By Targon on 6/26/2009 1:15:07 PM , Rating: 2
It seemed that Palm Treo devices suddenly were dropping off the web sites of the cell phone companies BEFORE the Pre was even available for sale. It makes sense that if they stopped the sale of the Treo phones from AT&T and Verizon that there would be a drop in overall numbers.




OOOH, I get it,
By austinag on 6/26/09, Rating: -1
RE: OOOH, I get it,
By Bender 123 on 6/26/2009 11:33:42 AM , Rating: 3
The outcome was actually very positive, compared to the market expectations and the stock has been climbing on the Pre and excitement over WebOS...Many businesses operate at a loss from time to time, but the overall sentiment is fairly positive for Palm and investors are swinging money their way.


RE: OOOH, I get it,
By mmcdonalataocdotgov on 6/26/09, Rating: 0
RE: OOOH, I get it,
By Bender 123 on 6/26/2009 12:06:16 PM , Rating: 3
No, its not a good thing, but the investment community seems to think they are moving forward. Many people forget Apple was operating at a loss in the mid 90's and seems to be doing just fine.

The issue with Palm compared to others, that declare bankruptcy at a loss, is that Palm can continue to service its debts and operate. With a new OS gaining traction and being well received, there is a lot to be positive about, moving forward.


RE: OOOH, I get it,
By Solandri on 6/27/2009 4:51:12 PM , Rating: 2
quote:
Many people forget Apple was operating at a loss in the mid 90's and seems to be doing just fine.

Hah. Forget the 1990s. I missed out on buying Apple stock when it was at its low in 2003 ($6.67 in equivalent in post-split shares, about the same as its value when the company started in the 1980s). I'd been following the introduction of the iPod, and it was lacking so many features found in other MP3 players that I figured Apple was doomed. So I didn't invest. Oh well.

http://www.google.com/finance?chdnp=1&chdd=1&chds=...


RE: OOOH, I get it,
By Iridium130m on 6/26/09, Rating: 0
RE: OOOH, I get it,
By Bender 123 on 6/26/2009 12:09:08 PM , Rating: 5
quote:
pre is missing a y: prey it saves palm prey it saves sprint


Prey is missing an a:
prAy is saves palm
prAy it saves Sprint

If you are going to use clever wording for a point, at least use the proper form of the word.

Prey is what a predator hunts...Pray is what you do at church.


RE: OOOH, I get it,
By austinag on 6/26/09, Rating: -1
RE: OOOH, I get it,
By Bender 123 on 6/26/2009 12:50:38 PM , Rating: 2
No, just into facts and not fanboism...My history here at DT pans that out.

Please feel free to see the financial history of the company you comment on, before you decide to make an assumption based on a snapshot. This is how flame wars start and it devolves the entire level of discussion.

http://www.google.com/finance?q=palm&oe=utf-8&rls=...

Palm is doing well enough that if you invested $1000 dollars in Palm stock in Early December, you would be able to sell it, today, for near $16,000. That does not sound like the investment trend of a company that is in a world of hurt.


RE: OOOH, I get it,
By Iridium130m on 6/26/2009 4:39:19 PM , Rating: 2
I actually wanted to go with pré but couldn't find the key on my phone.


RE: OOOH, I get it,
By Zaphod Beeblebrox on 6/26/2009 5:44:49 PM , Rating: 2
Don't be so dramatic. It stands for Pre-Bailout.
Yeah free taxpayer money! WEEEEE.


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