NEW YORK -(Dow Jones)- Palm reported fiscal third-quarter earnings that topped Wall Street expectations, but offered up tepid forecasts for the next period.
The Sunnyvale, Calif., company's earnings capped off another active day for the handheld device maker, which has endured persisting rumors that it is a takeover candidate. It was an ongoing question on the quarterly conference call, but management continued to decline comment.
The handheld device maker reported third-quarter net income of $11.8 million, or 11 cents a share, down from $29.9 million, or 28 cents a share.
Excluding one-time charges relating to stock-based compensation and in-process research and development costs from acquisitions, the company said it earned 16 cents a share. Analysts, on average, forecast earnings of 12 cents a share.
Revenue, meanwhile, rose 5.7% to $410.5 million from $388.5 million a year ago.
For the next quarter, Palm expects to earn 10 cents to 13 cents a share, or 13 cents to 16 cents a share excluding one-time items. Revenue is expected to be $400 million to $410 million.
Chief Financial Officer Andy Brown said the company's estimate for the fourth quarter was within its normal range, and didn't represent anything unusual.
Brown also warned that he expects the average selling price of Palm's devices to decline as it reaches a broader market.
Earlier Thursday, Palm scored a minor victory when a Virginia court judge ordered a stay in the NTP-Palm infringement case pending the outcome of a review by the U.S. Patent and Trademark Office.
"It is entirely possible that the PTO will determine that such patents were wrongly issued and that the Plaintiff (NTP) is not the owner of the interests in the dispute," Judge James Spencer wrote in an order issued Thursday. "In that event, NTP would ostensibly lack the standing necessary to bring an action for infringement, and the case would be dismissed."
The judge had refused to grant a stay to Research in Motion Ltd. (RIMM) when it was in a similar patent dispute with NTP, a Virginia patent-holding company.
But the stay did little to help the stock, which sank nearly 9% to $17.74. In after-hours trading, it ticked up 1.4% to $17.99.
Shares fell after Motorola - who was seen as a potential acquirer - warned late Wednesday that its first-quarter results would be substantially lower than expectations. Motorola's struggles damped speculation that it would make a move. The stock has risen 32.3% since hitting its 52-week low in December, mostly propelled by the takeover talk.
The other possible acquirers include Nokia, which earlier in the week was seen as a favorite, and two private equity firms, according to industry blog Unstrung.com. Palm had hired Morgan Stanley to explore its options.
Merrill Lynch noted that Palm's invitation for its analyst day April 10 suggests no imminent bid.
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 23rd March 2007
Posted to: www.cellular-news.com/story/22755.php