announced today that fourth-quarter revenue will be approximately US$230 million — a drop from previous forecasts of $290 million to $300 million. Also, Palm officials said the company won’t meet its breakeven profitability expectations for the current quarter, which ends May 31.
Still, Palm still expects to report operational performance in line with prior guidance, according to said Eric Benhamou, Palm chairman and chief executive officer. In addition, the share for Palm branded and Palm powered handhelds in U.S. retail grew over the last three months, and according to first-quarter 2002 worldwide data, both Palm branded device and Palm OS share are holding steady, he added.
“Demand in spring did not materialize as we had previously expected, but rather market conditions deteriorated compared to both the year-ago quarter and recent months,” Benhamou said in a statement addressing the finances. “While we remain optimistic about the long-term growth opportunities in the sector, we are disappointed that we will not meet our revenue and profitability goals this quarter. Despite the down market environment, Palm is executing well. We expect to report improved gross margins, excellent expense management and a good cash position.”
He said that the company is still on track to meet its three corporate objectives for 2002:
Create two well-capitalized, profitable, high-growth companies (one largely device-oriented and the other related to the Palm operating system);
Execute Palm’s enterprise strategy on time and on budget;
Migrate the Palm operating system and solutions to the ARM processor.