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Palm Q1 Revenue Decreases 20%

9/24/2002 08:40:00 AM Eastern

Milpitas, Calif. - Handheld computer maker Palm reported a 20 percent drop in revenue for its fiscal first quarter, down to $172.3 million, compared with $214.3 million in the year-ago period.

The PDA company recorded a pro forma net loss in the first three months of $36.4 million, compared with a net loss of $38.7 million in the same three months last year. Actual net loss for the first quarter widened to $258.7 million, including a non-cash charge of $219.1, compared with $32.4 million in the first quarter a year ago.

Palm, which attributed its quarterly results to the overall weakness in technology spending, said it has cut costs and is looking ahead to increasing sales in 2003. Improvements for the first quarter, ended August 30, include a pro forma gross margin of 31.4 percent, 430 basis points better than the same three months in 2001. Pro forma operating expenses reached $86.1 million in the first three months, down from $118.1 million year over year.

Palm's largest segment, its Solutions Group, which is responsible for Palm-branded handheld computers, had first-quarter revenue of $164.7 million, down from $209.3 million in the same period last year.

Operating expenses for this segment hit $69.1 million, compared with $96.6 million in the first quarter of 2001.

Pro forma segment operating loss dropped to $31 million in the first three months, down from an operating loss of $50.2 million in the same quarter last year.

During the first quarter, Palm said it shipped 819,000 Palm-branded devices, down from 891,000 in the previous quarter, but up from 750,000 in the year-ago first quarter.