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Palm Issues Revenue Warning
On Thursday, Palm issued revised revenue guidance stating that it expects that revenues for the third quarter of fiscal year 2010 will be in the range of $285 million to $310 million on a GAAP basis and in the range of $300 million to $320 million on a non-GAAP basis.
That is well below the $425.4 million analysts had been expecting. As a result, revenue for the fiscal year will be "well below" the $1.6 billion to $1.8 billion the company had projected.
In their statement, Palm said "Revenues for the quarter and full year are being impacted by slower than expected consumer adoption of the company's products that has resulted in lower than expected order volumes from carriers and the deferral of orders to future periods."
The Wall Street Journal got a hold of a memo to employees where Palm's CEO Jon Rubinstein further elaborated on the reasons behind the disappointing sales and what the company is doing to change that.
...I realize this news is difficult to swallow. We made this announcement today to prevent a surprise for Wall Street when we announce quarterly earnings in March. In the meantime, the entire executive team has been working extremely hard to improve product performance, and have implemented a number of initiatives to increase awareness and drive sales.
...To accelerate sales, we initiated Project JumpStart nearly three weeks ago. Since then, nearly two hundred Palm Brand Ambassadors, supplemented by Palm employees from Sunnyvale, have been training Verizon sales reps across the U.S. on our products. Early results from the stores have already shown improvement on product knowledge and sales week over week. You may have also seen a growing number of Palm ads on billboards, bus shelters, buses, and subway stations --all getting the word out about Palm.
On Thursday, PALM closed at $6.53.
The company will provide more detail on its financial results during Palm's third-quarter financial results conference call currently scheduled for Thursday, March 18.
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You can more at our sister site, PreCentral. Heres the link to one story: "Palm Updates Stock Guidance Amid Stock Volatility and Slow Sales"
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