KNOCK! KNOCK!
WHO'S THERE?
Uncle Billy.
Uncle Billy who?
Uncle Billy from IDCC who wants you to put your John Hancock on this license agreement.
Reuters
PalmOne Swings to Quarterly Profit
Monday June 21, 7:52 pm ET
By Franklin Paul
NEW YORK (Reuters) - PalmOne Inc. (NasdaqNM:PLMO - News) on Monday reported a profit that was more than twice Wall Street estimates on strong sales of its Treo 600 combination mobile phone and digital organizer, and set aggressive forecasts, which boosted its stock by 22 percent in after-hours trade.
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The shares rose to their highest level this year after palmOne posted its first profit as a stand-alone company. It is the hardware arm of the former Palm Inc., which split off its software side last year.
PalmOne said it is optimistic about increasing profitability in the current year, as the percentage of its overall sales of high-growth communications devices, also called "smartphones," increases to about 50 percent, from 28 percent in the fourth quarter.
Analysts cheered this anticipated evolution for palmOne, noting that hundreds of millions of phones are sold each year, dwarfing the entire market for handheld computers.
"Once they become more heavily weighted to the smartphone market, their growth has an opportunity to accelerate, because the handset market is such a green pasture," said analyst Jonathan Hoopes of William Smith Company.
Fourth-quarter net income was $13.3 million, or 27 cents a share, compared with a net loss of $15 million, or 51 cents a share, a year earlier. Wall Street analysts were expecting earnings of 13 cents per share.
Revenue rose to $267.3 million from $217.1 million in the period, which ended in May. Wall Street analysts had expected the company to deliver revenue of $253 million, according to Reuters Estimates.
TAKING SONY MARKET SHARE
During a conference call with analysts the company also said it would attempt to gain market share later this year created by the absence of Sony Corp. (Tokyo:6758.T - News), which recently said it would stop selling new handheld computers outside of Japan.
While demand for the pocket digital organizers has decreased sharply in recent years, palmOne has scored with sales of less expensive devices and the Treo line, which combines a phone with a handheld computer that is capable of instant messaging and creating and receiving e-mail.
But the company still faces tough competition from niche rivals, such as Research In Motion's (Toronto:RIM.TO - News) BlackBerry e-mail machine, and far bigger phone makers like Nokia (NOK1V.HE)
PalmOne said it shipped some 1.1 million devices across all of its Zire, Tungsten and Treo brands during the fourth fiscal quarter, including 151,000 Treo 600s. In all the company shipped some 4.1 million devices during the year.
Looking ahead, it said it sees fiscal first-quarter profit of 12 cents a share on revenue of $250 million to $260 million, and full year profit of $1.15 a share to $1.25 a share, on revenue of $1.21 billion to $1.29 billion.
Analysts had expected the company to break even on revenues of $237.6 million for the first quarter and earn 73 cents a share on revenues of $1.14 billion for fiscal 2005.
Shares of palmOne climbed about 22 percent in after-hours trading, rising to $26.30 from $21.46 at the close on the Nasdaq.
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