Palm on Earnings: Brace for Bad News

Posted 02/26/2010 at 1:01pm | by Pulkit Chandna

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While there is no gainsaying the fact that the Pre did lend a fatally rudderless Palm some direction, the much anticipated forward thrust is an entirely different matter. The impetus that Palm hoped to receive from its dapper webOS products hasn't materialized. The Sunnyvale-based company has lowered its guidance for the current fiscal. It blamed the move on lower-than-expected sales of its new webOS-based phones.

“Since the quarter has not yet closed, it is too soon to offer exact numbers, but we stated that we expect to report revenues for Q3 between $300 and $320 million. We also announced that we expect our revenue for this fiscal year to fall below the guidance we gave to Wall Street, which ranged from $1.6 to $1.8 billion,” CEO Jon Rubinstein announced in an internal email meant for employees. Its full financial results will be announced next month.

Rubinstein clarified that the the abrupt announcement was being made in order to “prevent a surprise for Wall Street when we announce quarterly earnings in March.” But this announcement did take many by surprise and sent its shares down south. Its share price dropped 13% on the news before eventually making a bit of a come back.

 The company is currently pursuing a new strategy to improve sales. “To accelerate sales, we initiated Project JumpStart nearly three weeks ago. Since then, nearly two hundred Palm Brand Ambassadors, supplemented by Palm employees from Sunnyvale, have been training Verizon sales reps across the U.S. on our products.” It clearly believes that lack of awareness and Verizon's poor handling of its products are the two major factors hampering sales.

Image Credit: HandCellPhone