Palm Sees Bright Spot (Named Pre) Amid Dismal 1Q Results

Palm on Thursday reported a loss of $164.5 million ($1.17 per share) for its first quarter of fiscal 2010, extending its streak of quarterly losses to nine. But its smartphone sales were up 134 percent in the quarter with 823,000 units shipped, up from the 351,000 it reported in the previous quarter.

While Palm didn't say how many of those sales were Palm Pres -- most analysts projected Pre sales between 500,000 and 540,000 -- it stands to reason the new Pre helped catalyze the increase.

Palm has staked recovery of its flagging smartphone fortunes on Pre, which was released in June to solid reviews, is carried exclusively by Sprint Nextel in the U.S. and sports Palm's new webOS operating system.

Palm CEO Jon Rubinstein, who joined Palm from Apple in 2007 and assumed Palm's top job in June, trumpeted the success of the Pre on the company's first quarter earnings conference call.

"With the launch of the Pre, we accomplished one of our most crucial milestones. Now we're focused on growth. We're confident we're on the path to success," he said.

Despite the Pre optimism, Palm's financials suggest it's far from out of the woods. That $164.5 million loss for the quarter was dramatically more than the $41.9 million loss Palm reported for the first quarter a year ago. Excluding one-time items, Palm's loss was $13.6 million.

Revenue was down 82 percent from $366.9 million in the year-ago quarter to $68 million. Adjusted sales were $360.7 million for the quarter, which did beat Wall Street estimates. Most analysts polled by Thomson Reuters had predicted adjusted sales of $297.7 million and a loss, excluding one-time items, of 24 cents per share.

Palm on Thursday forecasted second quarter adjusted revenue of $240 to $270 million.

Once the dominant name in smartphones, Palm has lost steady ground over the years to both Research In Motion and Apple, whose respective smartphone juggernauts, BlackBerry and iPhone, have succeeded in pushing Palm into the background.

Anticipation of the Pre, however, has seen Palm's stock more than quadruple in value in the past year. The Pre saw a price drop last week, bringing it down to $150.

Palm last week also introduced Palm Pixi, another Sprint-exclusive smartphone expected to be available in time for the holiday season, though observers have questioned the timing of Pixi's arrival, suggesting it would cannibalize sales of Pre because the two phones are so similar.