Palm (PALM) Bites The Dust As Yield-Per-Phone Collapses

Things were supposed to be bad at Palm (PALM), but, based on earnings, they were even worse.

The firm, which has products which compete with the Apple (AAPL) iPhone and RIM (RIMM) Blackberry, among others, posted a loss of $41 million on revenue of $296 million. For the quarter ending May 31 a year ago, the numbers were much better. Revenue was $410 million and the company had a $17 million net profit.

According to the company "Smartphone sell-through for the quarter reached a record high, totaling 968,000 units, up 29 percent year over year." That means the price that Palm got for each phone was awful.

Cash and short-term investments were $258 million at the end of the quarter compared to $546 million at the end of the period a year ago.

The market did not much like the news. Shares were down almost 8% after hours to $6.01.

Douglas A. McIntyre