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Palm Pares Losses, But Smartphone Sales Still Way Down

Palm Inc. (PALM) managed to narrow its net losses on higher sales for the third fiscal quarter of 2010. But, paradoxically, even though Palm shipped more smartphones to distributors than investors expected, fewer of those devices sold to consumers than forecast.

Indeed, Palm, maker of the Palm Pre and Pixi smartphones, continues to lose market share to rivals such as the iPhone and Droid. Despite that, however, Palm did pare its net losses from $95 million a year ago to $18.5 million. If it weren’t for certain charges Palm incurred, it would have lost $102.8 million.

Still, revenue hit $350 million, up from the $0.6 million in 2009’s fiscal third quarter. Analysts polled by Thomson Reuters had predicted sales of $316.2 million.

In a prepared statement, Jon Rubinstein, Palm’s chairman and CEO, alluded to the company’s recent woes, then put the typical upbeat spin on the situation.

“Our recent underperformance has been very disappointing, but the potential for Palm remains strong,” he said. “The work we’re doing to improve sales is having an impact, we’re making great progress on future products, and we’re looking forward to upcoming launches with new carrier partners. Most importantly, we have built a unique and highly differentiated platform in webOS, which will provide us with a considerable – and growing – advantage as we move forward.”

Investors must have agreed with the positive outlook. Palm’s shares closed 5.21 percent higher on Thursday at $5.65.


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