Just yesterday, I considered the options for Sunnyvale, Calif.-based Palm (NSDQ: PALM)—should they sell or should they look for a partner.
Today, everything must be under consideration after the company issued a formal warning that revenues would fall below expectations because “slower than expected consumer adoption of the company’s products … has resulted in lower than expected order volumes from carriers and the deferral of orders to future periods.” In summary, Palm said 2010 revenues will be well below its previously forecasted range of $1.6 billion to $1.8 billion. Release.
In today’s trading, Palm’s stock is down $1.09, or 13.5 percent to trade at $7 a share.
On March 18, Palm will announce its third-quarter financial results at 4 p.m. Eastern, followed by a conference call. The call will be hosted by Jon Rubinstein, Palm’s chairman and CEO, who will have to work hard to convince both analysts and the investors that Palm has a strategy for reversing its course. In a release today, Rubinstein said: “Driving broad consumer adoption of Palm products is taking longer than we anticipated. Our carrier partners remain committed, and we are working closely with them to increase awareness and drive sales of our differentiated Palm products.”
Third quarter revenues are expected to fall between $285 million to $310 million on a GAAP basis and in the range of $300 million to $320 million on a non-GAAP basis. With less revenues coming in the door, it now expects to close its third fiscal quarter with a cash balance in excess of $500 million.