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Palm warns of revenue drop before Pre launch

updated 07:35 pm EST, Tue March 3, 2009

Palm revenues decline

Despite the buzz surrounding the unreleased Pre handset, Palm expects its financial report to show a continued decline in revenue through the third quarter of FY09 as the company experiences reduced demand for its older Centro and Treo devices. The delayed launch of the Treo Pro in the United States and the current economic recession have further contributed to the company's troubles.

"The much-anticipated launch of the Palm Pre remains on track for the first half of calendar year 2009, but as expected we've got a difficult transition period to work through," said CEO Ed Culligan.

The company expects the amount of cash used in operations for the quarter to fall between $95 million and $100 million, while the cash on hand combined with cash equivalents and short-term investments should total between $215 million and $220 million. Palm is considering buffering its cash position by remarketing a portion of its common shares.

Internal memos from Sprint indicated that the release plans for the upcoming CDMA Treo Pro would be put on hold indefinitely. The handset had already extended beyond an initial delay that pointed to availability beginning February 15th. Alltel plans to offer the phone starting this Thursday.

The Pre is widely believed to launch sometime in May, and could serve as a replacement for some of Palm's aging smartphones.

by MacNN Staff



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