Palm earnings plunge 43% in Q4

Palm reported a 43 % plunge in fiscal fourth-quarter profit amid sharply rising costs and blistering competition, an Associated Press report said.

But the maker of mobile computing devices also reported record sales of its Palm Treo lineup, and fourth-quarter performance easily beat Wall Street's tepid expectations, the Associated Press report also said.

For the three months ended June 1, the company said it earned $15.4 million on revenue of $401.3 million, the report said.

In the year-ago period, Palm earned $27.2 million on sales of $403.1 million, it added.

Excluding $5.4 million in stock-based compensation and other one-time charges, Palm said it earned $17.8 million compared with $30.6 million in the year-ago period.

The report said on that basis, analysts were expecting earnings of $14.43 million per share on sales of $406.58 million, according to a survey by Thomson Financial.

The company reported record smart phone sales. Palm sold 750,000 Treos last quarter, up 43% from the year-ago quarter.
Smart phones generated $344.2 million, up 14% from the fourth quarter of 2006.

But Palm, which laid off about 100 workers earlier this year and closed the quarter with about 1,100 employees, reported sharply rising costs, the Associated Press report said.

Executives at both Palm and RIM meanwhile are nervously awaiting initial sales figures from Apple, which is expected to launch its own smart phone, the report further said.