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  1. roams11's Avatar
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    I am pasting the whole article; a bit long, but the cool quote is in bold towards the end. Hopefully good news all around!

    UPDATE: Palm Inc Shares Rally As Investors Look Beyond Losses
    Friday 06/26/2009 12:23 PM ET - Dow Jones News

    Related Companies
    Symbol Last %Chg
    AAPL 142.30 1.74%
    PALM 16.48 17.55%
    RIMM 71.15 2.67%
    S 4.89 4.49%
    As of 2:50 PM ET 6/26/09

    (Includes analysts' comments, updates share price)

    By Dan Gallagher

    Shares of Palm Inc. (PALM) rallied 16% early Friday as investors reacted favorably to the handset maker's fourth-quarter financial results - even though the period didn't include sales of the company's newly launched Pre smartphone.
    Late Thursday, the company reported its quarterly losses widened on a sharp drop in sales. Palm's fiscal fourth-quarter ended May 29, a week or so before the company's popular Pre smart phone went on sale. The company didn't issue a forecast for the current period, but said it expects to be cash-flow positive by the end of the calendar year.
    Shares of Palm were up $2.24 to $16.26 in midday trading.
    "It was encouraging to hear management's confidence in targeting pro-forma EPS and cash-flow breakeven by early [2010], with no immediate need to raise more cash," Vivek Arya of Bank or America wrote in a note to clients on Friday.
    Arya and other analysts have been closely watching the company's cash levels, as Palm is looking to revive its business by launching a host of new devices on its newly developed webOS platform. The Pre - which went on sale at Sprint (S) on June 6 - is the first of those devices.
    "While we are encouraged by the bare bones spending in the quarter, we do expect [operating expenses] to ramp materially in the August quarter to support the launch of the Pre," wrote Matthew Thornton of Avian Securities.
    In its conference call, Palm gave little in the way of detail on the Pre launch, except to say that it exceeded the company's expectations.
    "We think the Pre is by far the best product we have ever shipped, and I am very happy with how we're managing the launch," Palm CEO Jon Rubinstein said on the call. "We're successfully ramping supply to meet demand that is strong and growing."
    Rubinstein noted that the company faces "vigorous competition" in the smartphone space now dominated by the BlackBerry from Research In Motion (RIMM) and the iPhone from Apple Inc. (AAPL).
    Analysts believe Palm shipped between 50,000-70,000 Pre units during the recently ended quarter. Palm is believed to be drawing an average selling price of around $450-$460 per unit - though Sprint is subsidizing the cost to sell the product to consumers at a price of $199 - competitive with other smartphones on the market.

    Valuation a growing concern

    Palm reported a loss of $91.5 million in the fourth quarter, and the company expects losses to continue for the rest of the year as it ramps up to build a new family of smartphones.
    But the company's stock has been on a strong run-up since the first of the year, when it first unveiled the Pre at the Consumer Electronics Show in Las Vegas.
    "We still see risk of demand fading and would not chase the stock at current levels as we believe current valuations and consensus expectations leave little room for further positive surprise," wrote Citigroup analyst Jim Suva, who maintained a hold rating on the shares.
    Wall Street is largely cautious toward the stock, though many analysts have been impressed by the Pre and webOS. Out of 23 analysts covering Palm, 11 carry neutral ratings while four rate the stock as a sell, according to Thomson Reuters. Only eight rate the stock as a buy.
    "We think Palm has demonstrated a marked improvement in execution which gives us some comfort that they can continue to build on the Pre's success so far," wrote Jonathan Goldberg of Deutsche Bank, who carries a buy rating. "We expect further device and carrier announcements in coming weeks."
    Palm said it had $255.1 million in cash and equivalents by the end of the period. CFO Doug Jeffries said the company has "sufficient capital to support our current operating plan and to make the necessary investments in marketing product development and operations to drive long-term success."

    -Dan Gallagher; 415-439-6400;

    (END) Dow Jones Newswires
    06-26-09 1223ET
    Copyright (c) 2009 Dow Jones & Company, Inc.
    Sprint Franken-Pre 2
  2. #2  

    Does this mean we'll have a DixieCentral? Or a EOSCentral?

    Are they going to change the name? Seems like they are committed to PreCentral. Hmmm... Now what? How about JRCentral. :-)
  3. efudd's Avatar
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