Palm takes loss, looks ahead

Palm Inc. is down, but not out.
The smartphone maker has struggled to develop a new operating system, bring relevant devices to market and seen its market share plunge-and just posted a loss of $841,000 for its first fiscal quarter, which ended Aug. 31. Revenue for the quarter grew only 1% to $360.8 million, year-on-year.
That’s down from the company’s $16.5 million profit in the year-ago quarter, on revenue of $355.8 million.
Company executives said that if one-time costs were excluded-$6.6 million in restructuring charges, $5 million for patent acquisition, $5.1 million for stock-based compensation costs-it would have earned $9.7 million for the quarter.
Analysts, meanwhile, are mixed on Palm’s fortunes.
The company’s latest device, the Centro, offers both a touchscreen and QWERTY keypad, plus messaging and multimedia, for the prosumer segment at $100 at Sprint Nextel Corp. Current Analysis analyst Avi Greengart said yesterday he is positive on the device and its opportunity to sell in volume. But one solid-selling device at one carrier is not enough to recapture market share and the inexpensive device may cannibalize sales of the company’s more expensive Treo line, according to Greengart.
Looking back, the company announced last month that it would deep-six its Foleo product in favor of an all-out pursuit of a new OS based on the open Linux platform. Looking forward, Palm said it would earn revenue in the range of $370 million to $380 million, down 3% to 6% from the year-ago quarter.
Palm’s stock was down around 3% following its earnings report to around $15.47 per share.