Palm’s latest results are in and it doesn’t look great.
“Non-GAAP Adjusted Revenues in the second quarter totaled $302.0 million, non-GAAP Adjusted Gross Profit was $77.3 million and non-GAAP Adjusted Gross Margin was 25.6 percent.”
“The company shipped a total of 783,000 smartphone units during the quarter, representing a 5 percent decrease from the first quarter of fiscal year 2010…”
“Non-GAAP Net Loss for the second quarter of fiscal year 2010 was $(59.6) million, or $(0.37) per diluted share.”
It really doesn’t greatly matter how much better than previous years this was, the fact is that Palm continues to hemorage money!
By my super simple math skills Palm would need to sell 19.7% more phones (all else being equal). That would be 937,526 phones. I don’t see that happening in the near future at all. Obviously their trending is downward, which makes sense after the initial hype with a new product launch.
Certainly, it is admirable that Palm has been able to do this well already but they are just not properly structured to continue the way they are. In my example above that only gets them to breakeven; doesn’t get them to the point of making profit and paying down past debt.
Palm doesn’t seem to have any plans for releasing new products, so any increase in sales is going to have to come from new carrier partnerships and make up for the sliding demand on Sprint.
I truly want WebOS to make it but I don’t see that happening with Palm. There needs to be a complete structuring of the company or they need to look for a buyer. While they still have money in the bank from their equity offering they will be through that this year if they can’t make significant changes in time.
Maybe they should set up a Paypal tip jar. I hear that works for Leo Laporte.