Palm sells record number of Treos in Q3

Computerworld - Palm Inc. said today it hit a company record for its smart phone sales in its third quarter, the reverse of yesterday's negative news from handset maker Motorola Inc.

Motorola had been named by analysts and some unnamed sources in news reports as a possible buyer of Palm Inc. Some news reports said Motorola's bad showing in handset sales and lowered revenue projections kept it from moving forward with the purchase. Neither company has commented publicly on such a deal. During a conference call on the earnings, CEO Ed Colligan said the company "is just not going to comment on rumors or speculation."

Palm's record was for sales of 738,000 smart phone units sold in the third quarter, an increase of 30% over the same quarter last year, and up 20% from the second quarter, according to a statement released late today.

Revenue for the third quarter that ended March 2 was $410 million, an increase of 5.6% over the $388 million revenue for the same quarter a year earlier. Net income was $11.8 million, or 11 cents per share, a drop from $29.9 million, or 28 cents per share, a year ago.

"We delivered solid results in the third fiscal quarter and continue to expand our global market presence," Colligan said. "Treo smart phone sell-through and revenue reached record levels and Palm products were available to smart phone customers through seven of the top 10 carriers in the world."

All four Treo models, the 700w, 700p, 750 and 680, accounted for $354 million in sales for the quarter, Colligan said in a conference call. Treo buyers pay "premium prices," Colligan said. "They still care about quality and about user experience and trust the Palm brand. We expect an even more competitive and profitable Palm to emerge."

Palm also said revenue for the fourth quarter will be in the range of $400 million to $410 million, with earnings per share of between 10 cents and 13 cents.

In a separate statement, Palm said it was pleased with U.S. District Court Judge James Spencer's decision today to grant a stay of proceedings in the patent infringement litigation brought against Palm by NTP. Spencer also acted to strike one portion of NTP's complaint alleging misbehavior at the U.S. Patent and Trademark Office.

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