Palm Treo 750 Delays May Be Worse Than Expected

| About: Palm, Inc. (PALM)

When Palm (PALM) pre-announced that results for the fiscal second quarter ended December 1 would come up short, it placed some of the blame on delays shipping the new Treo 750 phone.

The company reports actual results on Tuesday; Bank of America’s Tim Long thinks the numbers should be in-line with the pre-announcement. (You’d hope so, for Palm’s sake.) Nonetheless, Long thinks there is risk to the company’s fiscal third quarter numbers. In particular he says that rather than shipping the 750 in December - the company had said it would ship the phone early in the fiscal third quarter - it may not show up in stores until late January or February.

He also notes that the Treo 680 phone is selling well, but that some colors are out of stock, “which is disappointing given the peak holiday season and new Treo marketing campaign.” He notes that a 50,000 unit miss equals about a penny a share to estimates.

Nonetheless, Long remains bullish on the stock, asserting that he is “confident” that Treo shipments will begin accelerating on a year-over-year basis in the third or fourth quarter. “As a result, we believe there is more of an opportunity for Palm shares post report because we think the stock will react more favorably before units move higher,” he wrote in a research note.

PALM 1-yr chart:

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