Palm Brings On Someone to Help With the Hardware
Palm( PALM) is adding some fresh blood in an effort to stabilize its crashing pulse.
The maker of handheld devices announced the appointment of Todd Bradley to the chief operating officer position of the solutions group, the hardware side of the company, on Friday, adding more experience to a management team that has been pummeled for causing its own revenue problems. Palm announced at the same time it will be cutting an undetermined number of jobs in the near future.
Palm's stock price has fallen from $15.50, when it first warned March 27 of a lagging fourth quarter, to today's news-bolstered point, just above $6.
Bradley comes with international, if somewhat tainted, big-company experience. He spent three years handling international markets for
Gateway
( GTW) as executive vice president of global operations at the computer maker before being expelled in January as part of an executive shakeup. Co-founder Ted Waitt fired six of the company's top officers on Jan. 30 and took control of the company as CEO.
Bradley took away a $1.7 million severance payment and received 31,250 accelerated stock options from the experience. Bradley's recent stint in the headlines is similarly inauspicious as he went from being a five-month member of the
PurchasePro
(PPRO)
board to the chairman's spot after controversial founder Charles "Junior" Johnson left the small B2B software player.
His Palm options should be priced nicely. The leader in handhelds has been in trauma care for several weeks after shooting itself in the foot, hand and elbow this spring with the early announcement but delayed launch of its new m500 line of handhelds.
Combined with a component buildup in anticipation of a bustling, not busting, 2001 market for handhelds, Palm has been forced to dramatically reduce expectations twice for its fourth quarter. On May 17, Palm slashed its lowered revenue forecast in half to $140 million to $160 million and projected a $170 million to $190 million loss.
Palm included in the Bradley release its opinion that m500 sales are picking up, and that according to market research firm
NPD
, the new devices made up 24% of the company's sales in its latest weekly report. "Despite the soft market, our efforts are beginning to show results," said Palm CEO Carl Yankowski in a press release. Palm touted growing market share, 67% according to NPD, which it did similarly on the conference call following the May 17 earnings warning.
There may be other reasons for that increase. Analyst Tom Sepenzis of
CIBC World Markets
wrote Friday that his checks showed retailers are cutting prices on the m500 line, a trend he considers "indicative of a slower-than-expected sell-through of the new devices in the channel." Sepenzis rates Palm a buy and his firm has not done underwriting for the company.
Palm also said it will be cutting more personnel, on top of the 300 contractor eliminations from mid-April. It will clarify the exact scope of the future layoffs in its upcoming fourth-quarter conference call.