After Palm announced its eighth consecutive quarter of double-digit revenue growth, its shares shot up yesterday by more than 7% to $33.08 in after-hours trading on the Nasdaq. The company shipped more than one million Treos in the first half of its calendar 2006, which is almost as many as it shipped in its full fiscal 2005.
And those shipments, according to Palm chief executive, Ed Colligan, were not bumped by the potential legal shut-down of rival Research in Motion Ltd’s business. (US patent house NTP had sued BlackBerry maker RIM for alleged patent infringement, which may result in a closure of RIM’s US service).
“I don’t believe RIM’s issues in the courts are really making a significant impact on us at this point,” Colligan said, on a conference call.
Palm’s quarterly profile rose to $260.9m, or $5.21 a share, in the quarter from $24.7m, or 48 cents, a year ago. Revenue of $444.6 million, which was 18% higher than a year ago, exceeded the company’s expectations, said CFO Andy Brown, on the call.
But even without the tax gain, Palm beat Wall Street’s expectations. Excluding one-time items, Palm posted a 46-cent-a-share profit; analysts had pegged 44 cents on revenue of $440.8m.
Colligan said Palm would launch four new Treo-branded smart phones next year, including its Windows-enabled Treo 700w, which is aimed squarely at the enterprise market.
While Palm’s business continues to be driven by the prosumer market, Colligan said it was expanding in the enterprise. The Treo 700w represents “a real opportunity to drive volume deeper into companies than it has been to date,” he said.
“When you look at most of our deployments and RIM’s, they are generally the director level and above … I can’t believe [enterprises] won’t deploy them more deeply if the recurring monthly costs become more reasonable,” Colligan said.