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Palm Reports Record Year

Sunnyvale, Calif. — Palm continued its strategic shift away from PDAs toward the fast-growth segment of smartphones, and reached the milestone of generating more than $1 billion in sales of smartphones during its fiscal year, ended June 2.

While the company reported a record year for revenue, its net income for the quarter fell short of Wall Street expectations, according to published reports.

Palm yesterday reported that revenue for its fourth quarter totaled $403.1 million up 20 percent from the same quarter a year ago, but less than street expectations of $405.4 million, said Reuters.

Palm admitted to a delay in sales to the enterprise channel. It said that while enterprise trials of the new Treo 700w models were proceeding well, the trials were slow to convert to actual sales because companies waited for the release of Palm’s new push e-mail solution in April and deployment of new Microsoft Exchange software, according to Palm president/CEO Ed Colligan.

Palm said net income for the quarter was $27.2 million compared with net income of $17.7 million for the quarter last year.

Revenue for the full year was $1.6 billion, up 24 percent from the $1.3 billion reported in fiscal 2005. Net income for the year was $336.2 million compared with $66.4 million in fiscal 2005.

Palm said smartphones accounted for 69 percent of revenue in fiscal 2006, compared witho 46 percent in fiscal 2005.

For the fourth quarter, smartphones accounted for 75 percent of revenue. The company said it sold 623,000 smartphones for the quarter, generating sales of $302 million. Handheld PDA shipments for the quarter totaled 495,000 units generating sales of $100.8 million.

In total, Palm shipped approximately 4.7 million devices in fiscal 2006, including 2.3 million Treo smartphones and 2.5 million handheld computers.

Palm said it is on track to deliver two new smartphones this year as planned.