Palm beats the market hands down - a bright future

Alexander Turcic · 03-24-2006, 05:38 AM

Palm (Nasdaq: Palm) has big plans for 2006. For starters, the company plans to further strengthen its smartphone business, to expand geographically (foremost Europe and Latin America), and to collaborate with partners to reach new markets. Thursday after the bell, Palm CEO Edward Colligan announced third quarter financial results, reporting earnings that jumped more than six-fold and beat analysts' estimate on higher revenues. Consequently investors cheered the news, with Palm stock surging more than 7 percent after hours.

Shortly before the earnings release, the WSJ argued that Palm profited from concerns among corporate users looking for alternatives to the Blackberry wireless e-mail service during RIM's patent dispute. The article quotes Joe Beery, CIO of US Airways Group, saying that he finds the Treo more usable than the Blackberry. The decision to count the Palm smartphone as another option for the airline came after he began evaluating alternatives to the more than 300 Blackberry devices currently deployed among US Airway's top executives.

According to Colligan, however, Palm's tremendous growth has "less to do with" the Blackberry patent suit. Instead he credited Palm's Microsoft-powered Treos helping boost sales. Windows Mobile "has opened doors" for Palm, in particular among potential corporate customers. According to Ontario-based market researcher Brandimensions, the Treo scores higher than the Blackberry in customer satisfaction.

Some points gathered from yesterday's conference call:

Treo sell-thru was 569'000 units, up 102% year-over-year
Gross margin was 33.6% (newer products with higher average selling prices)
Revenue from smartphones: 74% (vs. 46% in Q3 2005)
Huge cash position: $99m in cash and short-term investments
Handheld revenues fell 35% year-to-year
Regarding pending Apple and Motorola phones: Palm is anticipating the products, but maintains that entire category is poised for growth
Head of product marketing group left Palm; plan to recruit new head
future: accelerate business in international markets (with new carrier relationships later this year)
future: more R&D spending on smartphones

Related news coverage:
Palm Reports Q3 FY06 Results (Palm)
Q3 2006 Earnings Conference Call (Palm)
Q3 2006 Conference Call Presentation (Palm)
Palm's 3Q Profits Soar, Beat Expectations (Associated Press)
How Palm's Treo Capitalized On Blackberry's Patent Fracas (WSJ)
Palm Shows Strong Hand (The Street)

Disclaimer: I own Palm stock in my portfolio.

TadW · 03-24-2006, 06:18 PM

Have you followed the stock movement today? What a sick world we are living in, where Palm obviously beats all estimates, and yet closes almost in the negatives by the end of the day.

Dick Tracy · 03-24-2006, 07:39 PM

Quote:

Originally Posted by TadW

Have you followed the stock movement today? What a sick world we are living in, where Palm obviously beats all estimates, and yet closes almost in the negatives by the end of the day.

Must be the CNET video.

TadW · 03-24-2006, 07:43 PM

Quote:

Originally Posted by Dick Tracy

Must be the CNET video.

I think I missed that one. Is it online?

TadW · 03-24-2006, 07:45 PM

Cramer is now into Palm: "I think you get into that stock, and you get into it big."
http://www.thestreet.com/_tscnav/fun.../10275627.html

03-24-2006, 05:38 AM	#1
Alexander Turcic Fully Converged Posts: 18,175 Karma: 14021202 Join Date: Oct 2002 Location: Switzerland Device: Too many to count here.	Palm beats the market hands down - a bright future Palm (Nasdaq: Palm) has big plans for 2006. For starters, the company plans to further strengthen its smartphone business, to expand geographically (foremost Europe and Latin America), and to collaborate with partners to reach new markets. Thursday after the bell, Palm CEO Edward Colligan announced third quarter financial results, reporting earnings that jumped more than six-fold and beat analysts' estimate on higher revenues. Consequently investors cheered the news, with Palm stock surging more than 7 percent after hours. Shortly before the earnings release, the WSJ argued that Palm profited from concerns among corporate users looking for alternatives to the Blackberry wireless e-mail service during RIM's patent dispute. The article quotes Joe Beery, CIO of US Airways Group, saying that he finds the Treo more usable than the Blackberry. The decision to count the Palm smartphone as another option for the airline came after he began evaluating alternatives to the more than 300 Blackberry devices currently deployed among US Airway's top executives. According to Colligan, however, Palm's tremendous growth has "less to do with" the Blackberry patent suit. Instead he credited Palm's Microsoft-powered Treos helping boost sales. Windows Mobile "has opened doors" for Palm, in particular among potential corporate customers. According to Ontario-based market researcher Brandimensions, the Treo scores higher than the Blackberry in customer satisfaction. Some points gathered from yesterday's conference call: Treo sell-thru was 569'000 units, up 102% year-over-year Gross margin was 33.6% (newer products with higher average selling prices) Revenue from smartphones: 74% (vs. 46% in Q3 2005) Huge cash position: $99m in cash and short-term investments Handheld revenues fell 35% year-to-year Regarding pending Apple and Motorola phones: Palm is anticipating the products, but maintains that entire category is poised for growth Head of product marketing group left Palm; plan to recruit new head future: accelerate business in international markets (with new carrier relationships later this year) future: more R&D spending on smartphones Related news coverage: Palm Reports Q3 FY06 Results (Palm) Q3 2006 Earnings Conference Call (Palm) Q3 2006 Conference Call Presentation (Palm) Palm's 3Q Profits Soar, Beat Expectations (Associated Press) How Palm's Treo Capitalized On Blackberry's Patent Fracas (WSJ) Palm Shows Strong Hand (The Street) Disclaimer: I own Palm stock in my portfolio. Attached Thumbnails

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03-24-2006, 06:18 PM	#2
TadW Uebermensch Posts: 2,583 Karma: 1094606 Join Date: Jul 2003 Location: Italy Device: Kindle	Have you followed the stock movement today? What a sick world we are living in, where Palm obviously beats all estimates, and yet closes almost in the negatives by the end of the day.

03-24-2006, 07:45 PM	#5
TadW Uebermensch Posts: 2,583 Karma: 1094606 Join Date: Jul 2003 Location: Italy Device: Kindle	Cramer is now into Palm: "I think you get into that stock, and you get into it big." http://www.thestreet.com/_tscnav/fun.../10275627.html

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