Palm Beats Lowered Estimates

Lucky for Palm (PALM Quote), it's moving in the right direction -- at least for one quarter.

The handheld device maker managed to turn itself around this summer, eking out a sequential improvement and besting Street estimates after a shocking spring-quarter slip that had investors worrying about Palm's viability. In its first fiscal quarter of 2002, ended August 31 and reported after the bell Thursday, the company put together $214.3 million in revenue for a 7 cents a share loss.

Back in June, it wasn't a sure thing that Palm would be able to pull out of an inventory binge that set off a chain of price wars that caused revenues to tumble 65% sequentially to $165 million. Palm took huge charges to get its balance sheet back in order, and insisted it would be able to turn in $200 million to $220 million in revenue in this quarter. Investors weren't confident Palm could do so, docking the stock 14.34% to $2.15 in trading before the announcement.

Palm's $214 million in revenue compares with the $401 million in revenue it notched a year ago in the seasonally weak fall quarter. Hard times brought on a disastrous reduction in sales in the fourth quarter of fiscal 2001, leaving Palm with only $165 million in the quarter. Today's results stack up favorably on a sequential basis. ...