Analysts expect Q2 results to match Palm's conservative guidance 7
At the end of last quarter’s financial results conference call, many analysts were taken aback by Palm’s prediction of lower sales for the quarter that is now drawing to a close. Palm’s stock has dropped some 30% in the last two months after strong launches by competitors on multiple networks, but now it’s looking like Palm’s expectations for their Q2 2010 results were mostly spot on.
Shaw Wu, a senior analyst at Kaufman Brothers, says that his checks through Palm’s supply and retail chain indicate that they’ve sold around 670,000 handsets in the past three months. Those 670,000 units include the Palm Pixi, but considering that launched just a few weeks ago, most of the 670,000 units are Palm Pre phones. The Pre’s higher price (Palm’s price to carriers, not the price charged by retailers) makes it the more lucrative of the two, and while Palm doesn’t break down their sales numbers by device, we expect they’re happy to have the Pre still selling well six months after its launch. While we aren’t certain what affect either event has had, the continuing price cuts for the Pre and the European launch on O2 no doubt blunted the expected US sales drop.
According to the Wall Street Journal, their survey of analysts revealed an average anticipated revenue for the quarter of $265.7 million. While that amounts to an increase of 39% over the same quarter last year, it still results in a projected loss of 32 cents a share, or $45 million total. Though any loss is not a good thing, it is considerably better than the 73 cents a share loss that Palm posted this time last year.
Where Palm goes from here results in mixed calls from analysts. Wu believes many investors have been “overly negative” and that Palm’s expansion onto new carriers in 2010 will help bolster the company’s success. On the other end is Tim Long of BMO Capital, who thinks that pressure from Android and poor response in Europe and to the Pixi “are creating challenges to Palm viability as a smart phone contender.” Who is right? We’ll find out on Thursday.