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Palm And RIMM: A Tale of Two Earnings

Thursday, 28 Jun 2007 | 5:05 PM ET

Both Palm and RIMM numbers are out and the two could not have drawn a more stark contrast to each other. RIMM announced a 3 for 1 stock split on blockbuster earnings: $1.17 vs. the $1.06 the Street was looking for. Revenue also beat: $1.08 billion instead of the $1.05 anticipated.

Unit shipments came in at 2.4 million, just as expected. But new subscribers soared: 1.2 million instead of the 1.14 million projected by the Street. The company also boosted guidance big-time: a new revenue range of $1.3 billion to $1.365 billion; and a new EPS range of $1.37-$1.49 per share. The current forecast had been $1.12. And all that in the face of the iPhone juggernaut beginning tomorrow. Wow.

But it's a decidedly different story at Palm: the company posts a fairly solid quarter, beating estimates by 2 cents (17 cents vs. the 15 cent consensus). But the topline was light: $401.3 million against the $406.6 million Street estimate.

It gets worse: the company did break its smart phone shipment record with 750,000 units sold. But some on the Street were north of 765,000 units. Guidance was also weak: revenue now expected to be somewhere between $355 million and $365 million. The Street was at $393 million. And Global Crown Capital was expecting $412 million. Palm shares were halted on the news. The conference call should be interesting.

The Street analysts I've been talking to nailed this: RIMM immune to iPhone. Palm's suffering may have only just begun.

Questions? Comments? TechCheck@cnbc.com

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