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Palm's Q3 2010 figures stung by 43 percent webOS device sell through

Palm's Q3 2010 figures stung by 43 percent webOS device sell through
There's plenty of furrowed brows at Palm (NASDAQ: PALM). The company's webOS technology is lauded, with the Unreal Engine 3 ported over to it in a matter of week. Something that Epic's been working on with respect to iPhone for months.

Game sales are also impressive. Financially though, things are much tougher.

The company’s just announced its Q3 2010 financials for the period ending February 26, 2010; something it had already downgraded due to "slower than expected consumer adoption of the company's products that has resulted in lower than expected order volumes".

Sitting on the shelf

There are some particularly striking figures when it comes to the number of devices Palm has shipped and sold.

During Q3 2010, it shipped 960,000 devices but only sold 43 percent of them - 408,000.

In terms of the number shipped, this was 23 percent up on Q2 2010, and up almost 300 percent compared to Q3 2009. However, sales were down 29 percent compared to Q2 2010 and down 15 percent year-on-year.

The result was the company booked $349.9 million in GAAP sales, and made a net loss of $22 million with a gross margin of 13.4 percent.

Palm made a GAAP net lost of $13.7 million in Q2 2010.

Downward trend?

Stripping out one-off costs and income to try and make year-on-year comparisons easier however, Palm's non-GAAP Q3 revenue was $336 million, and with a net loss was $102.8 million, compared to a loss of $45.5 million in Q2 2010.

"Our recent underperformance has been very disappointing, but the potential for Palm remains strong," said Jon Rubinstein, Palm chairman and chief executive officer.

"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."

Still, it's not all bad news. The company ended the quarter with cash, cash equivalents and short-term investments balance at $592 million. Cash used from operations for the third quarter of fiscal year 2010 was a mere $0.5 million.

[source: Palm]

Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.

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