Palm has announced their fiscal results for Q3 2010, and in short, it’s not pretty.
Revenue was reported at a $349.9 million, though these are GAAP-adjusted numbers (GAAP accounting defers revenue over the expected service life of the device: 2 years). From a non-GAAP perspective, Palm brought in $366 million in the most recent quarter. Profit-wise, Palm netted a gross profit of $47 million (non-GAAP: $63.5 million). Accounting profits aside, Palm still managed to spend more than they brought in, burning through an additional $22 million this past quarter. Non-GAAP losses: $102.8 million, compared to $45.5 million the previous quarter. Palm ended Q3 FY 2010 with $591.9 million in cash, cash equivalents, and short-term assets.
The previous quarter Palm brought in $78.1 million (non-GAAP: $302 million) with a gross profit of $5.5 million ($77.3 million). After other expenses, Palm still managed to burn through $85 million cash during the prior quarter. At the very least, Palm has managed to slow the drain rate from their coffers, but as with any company they can only burn cash for so long.
For Q3 FY2010, Palm shipped 960,000 devices, and increase of 23% over the previous quarter, with sell-through numbers of 408,000. In short, selling fewer than half as many units as you ship is not a good position to be in. Also, selling fewer devices the quarter you launch your newest devices onto the biggest network yet is also not a good thing. No breakdown by device or carrier was provided, as is customary for Palm’s quarterly reports. During Q2, Palm shipped 783,000, with sales of 573,000 units.
Obviously, Palm’s expectations for this quarter were higher. As said by CEO Jon Rubinstein:
“Our recent underperformance has been very disappointing, but the potential for Palm remains strong. The work we’re doing to improve sales is having an impact, we’re making great progress on future products, and we’re looking forward to upcoming launches with new carrier partners. Most importantly, we have built a unique and highly differentiated platform in webOS, which will provide us with a considerable – and growing – advantage as we move forward.”
The full Q3 FY2010 report is after the break.