Seeking Alpha
Profile| Send Message|
( followers)  

Palm (PALM) is expected to report Q3 earnings after the market close on Thursday, March 18, with a conference call scheduled for 4:30 pm ET.

Guidance

The consensus estimate is (42c) for EPS and $316.19M for revenue, according to First Call. Analysts have been questioning the long-term viability of the smart-phone maker's business, suggesting that Palm is now too small to compete with Apple (NASDAQ:AAPL) and Research In Motion (RIMM). Instead, it is speculated that Palm might be targeted for a takeover by another manufacturer, by someone like Motorola (MOT), that may want Palm's software and patents. Analysts have suggested that Palm is now too small to compete with Apple Inc. and Research In Motion Ltd., maker of the BlackBerry. Instead, it might be targeted for a takeover by another manufacturer, like Motorola Inc., that may want Palm's software and patents. But a takeover doesn't appear imminent. On Feb. 25, Palm sharply cut its revenue forecast for Q3 to $285M-$310M. For FY10, the company said its revenue will be "well below" its previous forecast of $1.6B-$1.8B.

Analyst Views

BMO Capital for Q3 is modeling revenues of $319M and EPS of (38c), slightly better than consensus. The firm is modeling 925K units at an ASP of $345. BMO Capital believes that if Palm does update revenue guidance will be below consensus for Q4 of (43c) on $305.77M in revenue and FY10 of (1.30) and $1.30B. BMO Capital is modeling Q4/FY10 revenue of $258M/$1.237B, respectively. The firm thinks sell through for the quarter was weak and will add to the 210K in channel inventory from the November quarter. BMO believes AT&T (NYSE:T) will delay the launch of the Pixie and Pre as long as possible. The focus will be on cash, AT&T launch, and new products. BMO does not believe that increased marketing spending will cure Palm's woes, although it seems that Palm believes it could.

Source: Earnings Preview: Palm

Check out Seeking Alpha’s new Earnings Center »