Sunnyvale, Calif. — Although revenue continued to climb, handheld computer maker Palm reported lower net income in its fiscal first quarter, due primarily to slower sales of digital organizers and higher overall costs.
First quarter revenue at Palm jumped 25 percent, reaching $342.2 million, up from a year-ago $273.1 million. Net income declined 7.1 percent in the three months, ended Aug. 31, down to $18.2 million, from $19.6 million in the same period last year.
Excluding the effects of amortization of intangible assets and deferred stock compensation, first quarter net income was $21.1 million, compared with $21.9 million in the same period the prior year.
Operating income in the first quarter came in at $18.3 million, down from the $23.1 million reported in the same time frame a year ago.
"We’re pleased with the company’s performance during the quarter," said Ed Colligan, president/CEO. "Treo smartphone sell-through was 470,000 units, which reflects an increase of more than 160 percent from the year-ago period. Our share in the handheld computer market rose, and we’re excited about the overall product roadmap."
At the same time sales of Treo smartphones were increasing substantially, Palm recorded a 22 percent drop in PDA sales.
Colligan also noted stronger competition overseas was the key reason for a lower second quarter revenue forecast.