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Palm Takes a Slappin'
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CNBC Silicon Valley Bureau Chief
The news today from Palm [PALM
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] is just plain ugly, and you gotta hand it to RBC Capital and Bank of America, who both came out Monday with negative calls on this stock.
(Though truth be told, while RBC's Mike Abramsky lowered his target from $25 to $17 a share, he curiously still maintained the firm's "buy" on its shares. Still, his concerns were well-founded.)
Why?
Palm says today its full-year 2010 revenue will come in well below its prior $1.6 billion to $1.8 billion. The Street was at $1.6 billion. Third quarter revenue is getting creamed, with the company expecting $285 million to $310 million. Consensus was at $425 million.
The news follows so much speculation of a much slower-than-expected ramp between Palm and its new partner Verizon [VZ
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]. For the better part of a year, Palm shares have been dramatically over-performing its news, and hype and hope far outpaced the company's marketplace realities.
Facts are facts: Apple's iPhone [AAPL
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]sales were up 100 percent year over year last quarter, Research in Motion continues its momentum, Microsoft [MSFT
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] released a new version of Mobile and it's getting rave reviews. Nokia is lurking. And then down there at the bottom: Motorola [MOT
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], even Google [GOOG
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] and its own, hard-to-sell handset, and Palm. Google's example shows just how hard it is to make a difference in this market right now. Competition is fierce. Palm should be a player, but it's just not.
And despite that, Palm has a strange swagger about it. If you've ever owned a Pug, you'll know what I mean: they're small dogs, great dogs, but they have a humorously inflated sense of themselves. They think they're much bigger dogs than they really are. (Ask mine, and Winston and Abby would certainly agree with that if they could talk!)
Palm is kind of like that.
I don't argue that the company's smartphones are compelling, or that its WebOS is intriguing. But the proof is in the marketplace. This company has just been unable to capture any real traction. Its shares catapult at the mere hint of some opportunity, and no one it seems wants to wait for a real sense of execution before bidding them up anew.
Today's news about dramatically lower revenue for the year is a painful lesson in hype over reality. A few analysts got it right and their clients, if they acted Monday, are happy campers this morning.
For the rest of the Palm faithful, it's yet another example of over-promise and under-deliver.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes
