Handspring suffers heavy drop in Q3 revenue

Blaming weakening demand for handheld devices, Handspring Inc. on Monday reported a larger loss than had been expected for its third quarter.

Revenue for the Mountain View, California-based PDA maker for the third quarter ended March 31 was $59.7 million, a steep drop from its reported revenue of $123.8 million for the same period last year, Handspring said in a statement.

International sales accounted for $11.5 million in revenue or 19 percent of the company’s total this quarter, Handspring’s Chief Financial Officer Bernard Whitney said in a telephone news conference.

The company posted a net income loss of US$23.7 million, or a loss of $0.18 per share for the quarter, Handspring said. That compares to a loss of $27.2 million, or $0.26 per share for the third quarter of 2001, the company said.

Analysts polled by Thomson Financial/First Call had pegged Handspring to lose $0.12 per share for the period.

Donna Dubinsky, founder, president and chief executive officer, said in the conference call that Handspring remained confident that its Treo communicator product — a combined mobile phone and PDA — would help lead the company back to profitability.

Nonetheless, the company said it expected sales in the fourth quarter to be between $47 million and $57 million with a loss of $0.09 to $0.13 per share, due in part to “continued price pressure” on its Visor product line, Whitney said.

Handspring shipped 47,000 units of Treo in the quarter since debuting the product in February, though only about 13,000 have been sold to consumers, Dubinsky said.

“It is clear to us that the level of training required to sell this product is greater than that of our past products and the amount of time needed to communicate broadly to consumers will be longer than we had predicted,” Dubinsky said.