Palm Posts Better Than Expected Financial Results

Well, that’s a bit of a surprise. Palm posted its quarterly financial results today, and as it turns out, the company is actually doing better than expected. Losses were lower than expected, sales were higher than expected, so from whatever way you look at it, the future is looking a little brighter. The quarter ended May 31, so sales of the Pre are not part of this one yet.

While analysts had expected a 66 USD cents per share loss, but it was actually “only” 40 USD cents per share. In addition, analysts expected that sales would drop to 80.1 million USD, but the reality is that they dropped to only 86.8 million USD. The period covering these results ended May 31, so the effect of the Pre, launched June 6, is not yet included in these figures. Following these results, Palm shares rose from 14.02 USD to 15.35 USD in after-market trading.

CEO of Palm, ex-Apple Jon Rubenstein, inventor of the iPod, expressed his thoughts on the debut of the Palm Pre. “[It] was a major milestone in Palm’s transformation,” Rubinstein said in the statement, “We have now officially re-entered the race.”

Jim Suva, an analyst at Citigroup Inc. in San Francisco, is very positive about the prospects of the Palm Pre. He expects Palm to sell 450000 webOS phones before the end of August. In addition, he expects Palm to sell another 675000 webOS phones during the three months after August.

The good thing about the Pre, and any other possible webOS devices, is that they really need not outsell the iPhone or RIM’s devices in order to be a success for Palm. Some are comparing the sales figures of the iPhone 3GS and the Pre, but this is of course rather nonsensical – the iPhone is at version 3, the operating system is at version 3, the 3GS is sold world-wide, and Apple has a massive brand behind its devices.

Just let Palm do its thing. They’ve released a device – out of nowhere – that has received basically unanimously positive reviews, a device built from scratch, with an operating system built from scratch. That’s no small feat.


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