Palm Q3 FY09 Conference Call Highlights
Palm Inc. today reported their seventh straight quarterly loss and one of their most financially difficult periods to date. Palm posted a net loss of $(98) million dollars on a total of $90.6 million in revenue. Smartphone sell-through for the quarter came in at 482,000 units, down nearly 20% from the previous quarter and down a whopping 42% from the same period last year.
While the same quarter saw Palm's triumphant, Palm Pre and webOS unveiling, the company still struggled with rapidly declining sales of its existing smartphones and handhelds. Palm cited numerous pricing and volume declines which lead to a major hit on its revenue due which was also compounded by the poor economic environment and the numerous Sprint Treo Pro launch delays.
Palm's financial performance for the quarter was frankly terrible. For the first time in years, the company had an overall higher net loss than total revenue. However, the situation is not as dire as it would seem. The recent stock offering re-marketing effort raised an additional $103.6 million dollars for the company. The funds are expected go towards the general operating expenses and Palm Pre launch efforts.
Smartphones accounted for 85% of total revenue at $77.5m. Palm shipped 330k units to carriers with 482k units sold through. Handhelds accounted for $13.1m of revenue on 100k units sold through.
In another note, Palm took a $5 million charge due to a warehouse inventory theft at an undisclosed third party facility. Palm says they were insured for the loss and expects to recognize a recovery when they receive the insurance payment.
Palm CEO Ed Colligan described the quarter as a "challenging transitional period." He reassured investors that the company has sufficient working capital and they have made tremendous progress over the past months. He says the company has been "meeting or exceeding" on their strategic objectives.
Palm Pre Launch Hopes
Colligan did make a few remarks regarding the Palm Pre's current status and launch plans. He was pressed repeatedly for details in the Q&A session, but as usual, he did not get specific on details. He did admit that Palm is still working on "polishing up" both the Pre's hardware and software design. They are also working on the usual carrier certification process. Colligan said that there are no "show stoppers" remaining that would potentially delay its launch. He also said he is quite pleased with the efforts to date and that Palm has been overwhelmed with positive reactions and carrier interest in the product.
While he was constantly pressed for a timeframe or any details on the Pre's launch date, Colligan stuck to his "as soon as possible" and "first half of the year" mantras. At one point he did mention that Palm has the next 15 weeks to finish up and prepare for the consumer launch. This would seem to indicate that he is still planning for a late June launch at the
earliest very latest.
And finally we will leave you with a quote. In the following clip from the call Ed Colligan talks about the future of WebOS from the Pre and beyond. He goes into the target market they had in mind when designing the Pre and the potential for WebOS to fuel a whole series of future products from Palm down the line.