Palm Reports $98 Million Loss, Sales Drop 71%
Mobile products company
reported a fiscal third-quarter loss late Thursday, as the company struggled to retain market share in an increasingly competitive mobile device market.
The Sunnyvale, Calif.-based company reported a fiscal third quarter loss of $98 million, or 89 cents per share, compared to a loss of $57 million, or 53 cents per share, in the year-ago period. Excluding one-time items, the company lost $94.7 million, or 86 cents per share.
Third-quarter sales fell a whopping 71% to $90.6 million, compared with $312.1 million in the year-ago period.
On average, Wall Street analysts expected a loss of 59 cents per share on sales of $105 million.
Palm is planning to launch its newest mobile phone, the "Pre," before July of this year. Some analysts expect the device will give Palm a much-needed lift, seeing sales of the device of as much as one million units by year-end.
Shares of Palm rose more than 50 cents, or 7%, in morning trading Friday.
Shares of Palm are way off their split-adjusted all-time highs of $802 they hit in. March of 2000. The stock has been on quite a run the last three months, going from $1.50 a share to more than $8 this morning.
The stock has technical support around the $5 price area. If the shares can continue their recent strength, we see overhead resistance around the $9-$13 levels. We do not currently rate this non-dividend paying stock, but do follow the name closely.
Palm does not currently pay a dividend.
Fluor Drops on Project Cancelation
shares are down 3% in early trading after the company announced it has received notification from
Kuwait National Petroleum Company
to stop work on the utilities and off sites for the al-Zour refinery.
The remaining contract value of approximately $2.1 billion will be removed from the company's backlog in the first quarter.
We removed shares of Fluor from our "Recommended" list back on Aug.12, when the stock was trading at $76.18. The company has a 1.29% dividend yield, based on last night's closing stock price of $38.81.
The stock has technical support in the $28-$30 price area. If the shares can rally, we see overhead resistance in the $45-$50 zone. We would remain on the sidelines for now.
Fluor Corp is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.
Sony Ericsson Warns of First-Quarter Loss
, the mobile phone-making joint venture between
warned Friday that weak sales would lead to a substantial first-quarter loss.
The company said that its first-quarter loss would be 340 million to 390 million euros, or $465 million to $533 million, excluding restructuring charges of 10 million to 20 million euros.
Sony Ericsson also said that its gross margin would decline in the quarter, in regards to both year-over-year and sequential figures. The company saw margins of 15% in the fourth quarter of last year.
The mobile-phone maker has struggled under increased competition in Europe and Asia, and has not had any sort of breakaway success with any device in the smart-phone market. Unlike most of its competitors, Sony Ericsson does not currently offer a touchscreen smart-phone, the market for which has exploded since
introduced its iPhone in mid-2007.
Shares of LM Ericsson AG were down nearly $1, or -10%, in morning trading Friday.
We have avoided shares of ERIC since our early June coverage began, when the stock was trading at $9.30. The company has a 1.61% dividend yield, based on last night's closing stock price of $9.30.
The stock has technical support around the $5 mark. If the shares can stabilize, we see overhead resistance around the $11.50-$12.00 price area. We would remain on the sidelines for now.
LM Ericsson AG is not recommended at this time, holding a Dividend.com Rating of 2.9 out of 5 stars.
Glaxo Trims Stake in Quest Diagnostics
were up slightly, after the announcement from
that it sold approximately 5.7 million shares of Quest Diagnostics for more than $250 million, reducing its stake to about 16.5%.
Glaxo said the sale was just an effort to reduce its stake, which will be 16.5% once the transaction is completed. GlaxoSmithKline management had recently said it would increase its restructuring efforts and look to cut costs.
We have avoided shares of DGX since our early June coverage began, when the stock was trading at $48.83. The company has a dividend yield of .90%, based on last night's closing stock price of $44.36.
The stock has technical support around the $30-$32 area. If the shares can firm up here, we see overhead resistance around the $51-$53 price mark. We would remain on the sidelines for now.
Neither company is currently on our "Recommended" list at this time.
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At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.
Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.