Palm: Revenue up, earnings down

Executives at the Treo maker also report record sales of the flagship product, but won't speculate on rumors of an imminent takeover.
Written by Erica Ogg, Contributor
Palm, maker of the Treo smart phone, posted higher revenue and a lower quarterly profit Thursday.

During a conference call with reporters and analysts, the company also said it shipped a record 738,000 Treos in the quarter ending March 2. That represents a 30 percent increase from the previous year, and a 20 percent jump from the previous quarter.

The Treo maker's revenue of $410.5 was a hair above the $400 million to $410 million earnings guidance it provided, and up nearly 6 percent from the $388.5 million reported a year ago. Its net income was $11.8 million, down nearly 61 percent from $29.9 million a year ago.

CEO Ed Colligan acknowledged that the average selling prices of smart phones had declined, which he said the company had anticipated, and expects to continue.

Investors and analysts peppered Colligan and CFO Andy Brown with questions about Palm's rumored sale, which had the blogosphere buzzing for the past month. Despite considerable rumors in recent weeks that the company could announce that it was being acquired as soon as today, executives stayed mum on that speculation. "As you can imagine, there's a lot of rumors and speculation out there. We're just not going to comment on that stuff," said Brown.

Colligan also declined to shed any light on the mysterious Jeff Hawkins project currently still in the research and development phase, or when an updated version of the Palm OS will be available.

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