Palm beats expectations in fourth quarter; stock surges after hours
Looks like Palm (PALM) is roaring back to credibility. After the markets closed today, the Sunnyvale, Calif.-based smartphone maker reported a net loss of $105 million, or 78 cents per share, for its fourth quarter ending May 29.
While it was far worse than its loss of $43.4 million, or 40 cents per share in the same period one year ago, it did beat analysts expectations for the quarter.Revenue for the quarter fell 70 percent to $86.8 million, better than Wall Street's forecast of $80.3 million and the company sold 351,000 smartphones during the quarter -- down by 62 percent from the same quarter last year, but up 6 percent from the third quarter of this year.
"The launch of Palm webOS and Palm Pre was a major milestone in Palm's transformation; we have now officially reentered the race," Palm CEO Jon Rubinstein said in a statement. "We have more to accomplish, but the groundwork is laid for a very promising future here at Palm."
Promising -- especially given that Palm released its highly touted Palm Pre a week after the close of its fourth quarter.
Palm now offers consumers a very real alternative to Apple's (AAPL) iPhone. Analysts are forecasting revenue growth of 144 percent in 2010. It is a real achievement since the market for smartphones is more competitive than ever with big players such as Research In Motion (RIMM), Nokia (NOK), Google (GOOG) and Samsung going head-to-head with each other.
Besides sales of handsets, the company was also able to put a damper on Apple, which regularly touts that more than one billion applications have been downloaded from its App Store for the iPhone and the iPod touch. According to mobile analytics company Medialet, Palm's App Catalog can now also boast one billion downloads.
The success of the Palm Pre is certainly in the design and functions of the phone. But the company also launched a huge advertising and public relations blitz for the handset and generated great interest when it launched an ad for the phone, priced at $200, on Facebook.
Palm says it will also go after the enterprise market, an area which Research In Motion dominates and Apple is competing. Expect to see customer relationship management (CRM) software apps from Oracle (ORCL) and Salesforce.com (CRM) among the new apps. Palm is also talking about a few other corporate-friendly features, such as the ability to remotely erase data, encrypt confidential information and even find a lost Palm Pre using GPS technology.
Shares closed about flat at $14.02 today, but are up more than 14 percent in after hours trading.