Palm Inc. (NASDAQ: PALM) rose ahead of earnings on short covering with shares posting an unofficial close of $5.65 for a 5.2% gain. The troubled smartphone maker reported earnings at -$0.61 EPS vs -$0.42 EPS expected from Thomson Reuters. The company also noted that non-GAAP revenues were $366.0 million versus closer to $316 million expected.
If you track margins, those were (Non-GAAP Adjusted Gross Margin) 17.3% and Palm said this was “impacted by a $45.3 million charge taken in the quarter for reserves for inventory purchase commitments, which exceed current forecasted demand.” Palm ended with cash and equivalents of $591.9 million, with a burn rate from operations of only $500,000.
The company said 960,000 units shipped versus expectations of roughly 850,000. That is a gain of 23% sequentially and 300% from a year ago when you compare the low penetration pre-launch. The company further noted there were 408,000 units sold versus more than 500,000 expected, down 29% sequentially and down 15% from a year ago.
The after-hours reaction has shares up at $5.72 after closing up 5.2% at $5.65 on the regular trading session. The big news was already given back in the February-end earnings warning. Today is just an example of biding time in a wait and see attitude. Before today’s gain before earnings, this stock has risen only 5 out of 22 trading days since the $9.99 close on February 12.
JON C. OGG
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