Palm's 4Q Loss Matches Wall Street Expectations

For the three months ended May 31, Palm said it lost $27.5 million, or 5 cents a share. In the year-ago period, the Santa Clara-based company lost $392.1 million, or 69 cents a share.

Excluding one-time events, the company reported a loss of $18 million, or 3 cents a share--compared to a loss of $89.2 million, or 16 cents per share, in the year-ago period.

After the company warned last month of weaker-than-expected sales, analysts dropped their expectations to $230.8 million in revenue and a loss of 3 cents per share, according to a survey by Thomson Financial/First Call.

The company said revenues for the quarter totaled $233 million, up 41 percent from the $165 million for the comparable period last year.

Palm executives told analysts in a conference call that they expect a loss in the current quarter and to break even in the following quarter with the help of new products and cost controls.

For the current quarter, Chief Financial Officer Judy Bruner said the company expects a pro forma operating loss in the range of $40 million to $45 million on revenues of $175 million to $185 million.

Palm remains the world's leading provider of personal digital assistants and of the operating system for handhelds, but it has struggled during the past few quarters to return to profitability after suffering huge losses from the economic slump in 2001 and a few admitted operational missteps.

As part of its turnaround strategy, the company is in the process of spinning off its software subsidiary, PalmSource Inc., which develops the Palm operating system used in Palm-branded devices and those of other licensees, such as Handspring Inc. and Sony Corp. On Monday, Palm named the founding board members of PalmSource.

Tuesday, Palm announced that Todd Bradley will takeover in September as president and chief executive of Palm's hardware division. Bradley, 43, has served as the division's chief operating officer since last June and as president since May.

For the fiscal year, Palm said it lost $82 million, or 14 cents per share, on revenue of $1.03 billion. In the previous year, Palm lost $356.5 million, or 63 cents per share, on revenue of $1.56 billion.

The company projected revenues for the next fiscal year will be $1 billion.

Shares of Palm closed down 8 cents to $1.59 on the Nasdaq Stock Market. The results were posted after the market close. Shares were up five cents to $1.64 in after-hours trading.

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