Ahead of the Bell: Palm results split analysts

Palm's silence on Pre sales and uneven revenue outlook split analysts

• On 9:18 am EDT, Friday September 18, 2009

NEW YORK (AP) -- Palm Inc.'s fiscal first-quarter results and guidance left analysts split on the likely outcome of the smart phone maker's turnaround effort.

Palm said late Thursday that it shipped 823,000 phones during the three months ended Aug. 28. But it did not say how many were the Palm Pre, the company's best hope for competing with the BlackBerry from Research in Motion Ltd., and Apple Inc.'s iPhone.

Palm also forecast sales for the full year of $1.6 billion to $1.8 billion, while analysts were expecting only $1.57 billion, according to Thomson Reuters. But for the current quarter, the company projects $240 million to $270 million in sales, below analysts' estimate of $344.4 million.

In a note to investors Friday, Canaccord Adams analyst Peter Misek said "questions surrounding management's soft (second-quarter) guidance will limit near-term upside in the stock."

He added that shares are already overpriced "given the abundance of new smart phone offerings on the horizon." He reiterated a "Sell" rating on the stock.

Deutsche Bank's Jonathan Goldberg took the opposite view. He kept a "Buy" rating on shares, telling clients, Palm's uneven outlook for the next few quarters suggests the company is lining up new carriers for its phones.

"We think momentum remains healthy," he said.

Palm shares rose 24 cents to $14.68 in premarket trading.

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