Despite Reaffirmed Guidance, Palm Faces Tough Season

Editor's Note: Jim Seymour's column runs exclusively on RealMoney.com; this is a special free look at Seymour's column. For a free trial subscription to RealMoney.com, click here. This article was published Nov. 29, 2001 on RealMoney.

Interesting report from Palm (PALM Quote) late Wednesday. While anecdotal data are all over the lot about what's happening with handheld (PDA) sales this quarter, Palm came in with a slightly better quarter than many expected -- and repeated its earlier guidance for the second quarter, which ends Friday.

That guidance is for a loss of 7 cents per share, with total revenue between $250 million and $280 million. As predicted here in the RealMoney.com Columnist Conversation earlier this week, Palm also announced more layoffs -- about 250 workers, 15% to 20% of its staff -- leaving a final headcount of about 1,100 employees and 100 or so contractors.

Losing 7 cents a share in a hot market like PDAs isn't good, of course, but after Palm's annus horribilis, anything that keeps it in business must look pretty good from inside Fortress Palm. With CEO Carl Yankowski's departure a few weeks ago, the company wants to present itself as finally getting beyond its problems: inventory overhang, lackadaisical and slow-moving management, delayed new-product development and an aging and in many ways uncompetitive product line. ...