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Handspring Q2 Revenue Down 31%

1/17/2003 01:29:00 PM Eastern

Mountain View, Calif. - Handspring's revenue drop about 31 percent in its fiscal second quarter, at a time it was making the transition from producing primarily personal organizers to making a line of combined cellphone/organizers, called Treo.

Revenue for the quarter totaled $47.8 million, compared with $70.5 million. Treo Communicator sales accounted for $31.9 million and organizers and accessories, $15.9 million.

Handspring's net loss for the second quarter, ending Dec. 28, was reduced to $12.3 million, compared with $19.8 million in the year-ago period. Pro forma, the company reported a net loss of $10 million in the second three months, compared with $14.4 million in the second quarter of 2001. The company reported a gross margin of 27.4 percent in the quarter.

For the six months, revenue dropped about 22 percent, reaching $101.9 million, down from $131.9 million in the same three months the previous year.

The net loss for the six months was about halved, down to $27.6 million, compared with a $52.5 million loss year over year.

Handspring said, while its long-term outlook remains positive, it sees a number of challenges in the next quarter that makes it cautious for its near-term outlook. The company expects revenue from organizers will decline substantially in the third quarter, while sell-through of Treo Communicators increases sequentially. However, communicator revenue in the third quarter will decline slightly as channel partners sell through existing merchandise.

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