Palm Earnings Call Today -- What Will We Learn? 14
Palm is scheduled to announce earnings today. A quick tour of stories appearing leading up to the announcement have Palm (PALM) showing a fiscal first-quarter loss of 24 cents a share and revenues of $305 million (down 17% year over year but up 169% quarter over quarter). However, Palm hasn't provided specific guidance.
According to a story at Seeking Alpha, the expected gross margin on an adjusted basis will be above 30% for the long term. Operating expenses are expected to be up from the prior quarter due to the aggressive marketing of Palm Pre and expansion of product development and sales & marketing capabilities.
One number that is anxiously awaited is how many Pre smartphones have been sold in Q1. Analysts have been kicking around 500,000 to 550,000. Some feel the total sell-through will be in the 700,000 to 800,000 range.
Morgan Joseph published a note stating that that they believe "shipments have slowed to approximately 100,000 units in July from approximately 200,000 in June, while August shipments may have tracked lower than July's. As a result, it estimates Pre shipments of 350,000 for the August quarter."
To date, Palm has not been reporting unit sales, much to everybody's chagrin.
The Globe and Mail did a story talking about the Palm comeback. It prominently featured a quote by Mike Abramsky, RBC Dominion Securities:
“Palm remains a turnaround play with near-term challenges that could result in volatility in financial results and valuation; we expect, however, these to be overcome in time and would accumulate shares on related weakness. ”
That story also noted that "extensive checks by Avian Securities LLC of Sprint and third-party retailers suggest that U.S. sales began to slow late in the quarter but that Palm's orders to build more devices were stronger than anticipated."
Positive factors noted by Matthew Thornton, an analyst with Avian, include ample supply to meet demand going forward, a boost in sales from a price cut announced last week, and the August 27 launch with Bell Canada. He also speculates that the increase in manufacturing orders could suggest plans to get the device out to the European market sooner than expected.
On the other hand, Eric Savitz in his Tech Trader Daily blog post, noted Canaccord Adams analyst Peter Misek has just cautioned that results could disappoint.
[By the way, in Savitz's post, the Street consensus is for revenue of $297.7 million and a loss of 24 cents a share]
Misek cut his top-line forecast to $278 million, from $381 million, with a new loss estimate of 45 cents a share, versus a loss of 29 cents previously. Misek writes that “based on recent handset survey results and channel checks,” there is software in Pre sales: he now sees unit sales for the phone in the quarter of 500,000, down from 750,000.
Hopefully, after the call today, we will have a better indication of whether Palm is truly on the road to profitability.
The Q1 FY2010 earnings conference call is scheduled to start at
4:30 pm Eastern. Information on how to participate can be found here. We'll be covering it, of course, here at PreCentral.net!
14 Comments
We'll probably learn that the Pre is selling well, however, you can't really compare it to the iPhone. That would be like comparing somebody to Michael Jordan.
I saw that same exact analogy yesterday about the Palm Pre. Weird.
That's funny - the only person I ever said this to was Dan Hesse.
LOL
Engineering school
Online Natural science School
We'll probably learn that the Pre is selling well, however, you can't really compare it to the iPhone. That would be like comparing somebody to Michael Jordan.
Online Visual Communication degree
Online computer Science school
Diploma Programs
"Operating expenses are expected to be up from the prior quarter due to the aggressive marketing of Palm Pre and expansion of product development and sales & marketing capabilities."
hmm... where did the aggressive marketing of the palm pre take place?
Wow, someone doesn't use the Internet or look at TV.
Or go to movies.
palm never release numbers.
They will release them today that's what the call is for. At least earnings numbers. There seems to be a range of estimates but what i'm seeing is:
estimates for sales are 533,000 handsets. (for some perspective, apple sold 3.8 million handsets in the same period).
Earnings per share estimates are at the -22% to -24% range.
revenue of 306.55 million are what analysts estimate.
So if Palm misses any of those i'd expect the stock to plummet in after hours. And flood into stronger stocks like Apple and Rimm. Probably the biggest day for palm since launch.
@blackmagic: (for some perspective, apple sold 3.8 million handsets in the same period).
for some real perspective apple sells phones in multiple countries to several operators, so your figures mean very little...if u r comparing palm to those figures u r a bigger idiot then we all suspect...;)
if you don't think every investor/analyst doesn't know that that Apple sells in many more countries then Palm sells their Pre then you're the idiot. Everybody knows that. Nobody said 3.8 million is the target for Pre sales. They dont' need to match sales numbers they need to beat sales expectations. Regardless 3.8 million It's a statement of what the market leader does and no sane investor ignores that. Palm does sell phones in all those countries however, just not the Pre. But it says something about a company's ability to deliver products to a market when you're competitors have cracked markets that you haven't. It's not dispositive just informative. Especially when considering that companies like Samsung and HTC can release new phones in multiple countries. You're also an idiot if you think investors on the call are NOT comparing Palm to Apple, Rimm, and other phone makers in a macro sense. Especially in terms of the fact that Palm has a lot of debt and the other leading companies like Apple do not, and have a large cash surplus plus other new products just introduced. This is about one thing. Making profits for investors. And they will go where the profit is. It's not about reactionary fanboy love for a given cell phone and any statement of fact as some irrational criticism. Only an idiot investor would NOT compare themselves to market leaders. Comparing doesn't mean you expect to equal iphone sales though. But as long as Palm and Apple both sell phones, and Apple is a leader, investors will compare the two. This is about satisfying investors not about making people that bought a phone feel good about their purchase. And they are right to do so whether Palm enthusiasts like it or not.
palm post -10% eps share loss. that's better then expectex
adjusted revenue $360.7 mill
16 million shares stock offering announced
but it's looking good for Palm.
it's not about reactionary fanboy adulation for a accustomed corpuscle buzz and any account of actuality as some aberrant criticism. Only an idiot broker would NOT analyze themselves to bazaar leaders. Comparing doesn't beggarly you apprehend to according iphone sales though. Being a