December 29, 2000, 2:03 PM — HANDHELD DEVICE VENDOR Palm Wednesday posted better-than-expected earnings for its second quarter of fiscal 2001, only to see its share price hit the skids amid a broad sellout of technology stocks.
For the quarter ended Dec. 1, Palm reported net income, excluding amortization and other one-time charges, of $27.5 million, or 5 cents per share, as compared to $15.5 million and 3 cents, respectively, during the same period a year earlier. Wall Street analysts had expected the company to post earnings per share of 4 cents, according to a poll of 15 brokerages conducted by First Call/Thomson Financial.
Revenue, meanwhile, rose to a record high of $522.2 million, more than double that of $258.6 million Palm reported for the corresponding quarter a year ago, according to a company statement.
Palm said it shipped 2.1 million units of its popular handheld devices during the most recent quarter, up 45 percent from the immediately prior quarter.
Investors, however, fled the stock. At the end of regular trading on the Nasdaq exchange, Palm shares had slid $5.50 on the day to close at $38.13. In after-hours trading, the share price continued to slide, and was last traded at $32, a further 16 percent drop, according to information from Nasdaq's Web site, citing IXL.
Separately, Palm on Wednesday also announced that it has reached a definitive agreement to acquire WeSync.com, a privately-held provider of synchronization software that allows groups to share information on Palm devices and PCs.
Palm said it will pay WeSync $40 million to $45 million in stock or cash, "depending on the circumstances at the time of closing." The deal is expected to close in Palm's third fiscal quarter, the company said.
Based in Portland, Ore., WeSync has 27 employees. The company was founded in 1997. Palm said the acquisition would enable it to offer to users more value-added wireless services in the future.