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Palm Tops Forecasts but Slashes Outlook

March 28, 2001|From Times Wire Services

Palm Inc. reported results in line with Wall Street expectations for its latest quarter but said slowing sales forced it to reduce its fiscal fourth-quarter projections. The leading maker of hand-held computers announced plans to cut about 250 jobs, or 15% of its work force.

The news sent Palm shares to as low as $10 in after-hours trading. They had closed the regular Nasdaq trading session at $15.50, up $1.06.

Palm said its operating earnings fell 41% to $9.3 million, or 2 cents a share, in its fiscal third quarter ended Feb. 28, a penny better than analysts expected. Revenue climbed 73% to $470.8 million.

The Santa Clara, Calif.-based company said it shipped 2.1 million devices in the quarter, up 112% from a year ago.

But the decelerating economy is expected to lead to flat sales growth in its fourth quarter, company executives said.

As a result, Palm expects a loss of 8 cents a share in its final quarter, on sales of $300 million to $315 million. It had been expected to earn 3 cents on sales of $572.6 million, according to First Call/Thomson Financial.

The company also has postponed construction of a new headquarters in San Jose that had been scheduled to begin this month, and it is reevaluating its real estate needs to reduce expenses, Bloomberg News reported.

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