PDA maker Palm Inc. said that its revenue for the third quarter rose to $470.8 million, up 73 percent from the same quarter last year. The company said that shipments of Palm PDAs also rose 112 percent to 2.1 million. The company reported a pro forma net income of $9.3 million, or $0.02 per share, for the third fiscal quarter of 2001. Despite a fairly rosy quarter, Palm is concerned about the current economic downturn and plans to reduce its workforce and trim operating expenses by up to 15 percent.
With the 2.1 million handhelds it has added to the channel this quarter, Palm said that it’s shipped a total of 13 million Palm PDAs all together. The company saw total revenues of $1.394 billion for the first nine months of fiscal 2001.
Palm CEO Carl Yankowski said that there’s a tremendous amount of support for Palm PDAs, from customers and developers alike. According to Yankowski, over 1,000 new Palm-compatible software applications came to market this past quarter, and the platform boasts 150,000 registered developers and more than 8,500 total software applications available commercially.
The company’s highlights this quarter include the introduction of the new m500 series, which utilize Palm OS 4.0, 16-bit color and other new features; the rollout of the entry-level m105 model; a launch of the beta version of Palm’s MyPalm personal mobile portal; and a strategic alliance with Sprint PCS to co-brand and co-market CDMA wireless products and services throughout North America.
This past quarter also saw Palm initiate or complete three acquisitions — in February, Palm completed the acquisition of WeSync, a software synchronization company; in March, the company reached an agreement to acquire Extended Systems Inc., a multivendor, multiplatform mobile solution software company; Palm also acquired peanutpress.com, a Web-based storefront that sells titles from major U.S. publishing houses.
Despite Palm’s impressive year-over-year growth and its aggressive acquisition schedule, Yankowski admits that Palm is feeling the effects of the deteriorating economy just like everyone else. Yankowski said that Palm expects to see demand for its products flatten in the fourth quarter, with revenues in the range of $300-$315 million. The company also expects to report a net loss of about 8 cents per share.
Cost-cutting is on Palm’s horizon, as well. Palm hopes to trim up to 15 percent of its operating expenses by the end of the first quarter. The company plans to cut 250 jobs for employees and contract workers, and has postponed the construction of a new corporate headquarters in Silicon Valley.