Palm Warns of Second-Quarter Loss, Revenue Shortfall
Palm warned Thursday it would post a fiscal second-quarter loss and revenue short of its target due to a delayed product shipment, an increase in repair expenses and a changing product mix.
Its shares fell 11.5 percent to $5.83 in late trade after closing up 27 cents, or 4.3 percent, at $6.59 on Nasdaq.
The maker of advanced cell phones and digital organizers forecast a loss of 22 cents to 24 cents per share on a GAAP basis, or a loss of 8 cents to 10 cents per share, excluding items it did not detail.
Analysts on average had expected a loss of 2 cents per share on a GAAP basis, and a profit of 2 cents per share, excluding items, according to Reuters Estimates.
It forecast revenue for the quarter ended Nov. 30 of $345 million to $350 million, compared with guidance of $370 million to $380 million provided on Oct. 1.
Analysts, on average, had expected revenue of $375.98 million, according to Reuters Estimates.
Palm also reduced its estimate for gross profit margins for the quarter to a range of 29.3 percent to 29.8 percent, from its earlier target range of 33.3 percent to 33.8 percent.
It said the warning reflected an unforeseen increase in warranty repair expenses and a shift in product mix that included higher-than-expected shipments of its lower-end Centro smartphone as well as the delayed product shipment.