PalmOne shares plunged yesterday 15 percent to $36.35 in after-hours trading after it reported fiscal second quarter results that disappointed investors and said third-quarter sales and profit would be below analyst estimates.
PalmOne CEO Todd Bradley told analysts on a conference call (
archived copy, WMA format) that a decline in revenue from the second to third fiscal quarter, and a lift in the fourth, was due to "typical handheld seasonality" and timing of the rollout of the Treo 650. Overall, Bradley sounded optimistic: "Our strategy is working, and this quarter's excellent growth in revenue and a more than tenfold increase in operating income from the year-ago quarter demonstrate we executed well. Our fall products raised the bar for competitors and earned widespread acclaim. And we grew our handheld-computer market share domestically and abroad."
PalmOne's share price more than doubled between mid-June and mid-December as investors bet that its new Treo 650 product would drive rapid sales growth.
Investors are now disappointed that Palm's third-quarter sales - which will include the important holiday shopping season and were expected to rise 31 percent versus a year ago - won't grow enough to justify the recent run-up in its shares.
Read the official report at
palmOne (PDF).