Handspring tops estimates, lowers outlook
update The handheld device maker posts a first-quarter pro forma loss of 2 cents per share above analysts estimates, but it cut its sales outlook for the current quarter.
The Mountain View, Calif.-based company posted a net loss of $15.3 million, or a loss of 11 cents per share, on revenue of $54.1 million. That compares with a net loss of $32 million, or 28 cents per share, on revenue of $61.4 million in the year-ago quarter.
Excluding amortization of deferred stock compensation and a charge associated with restructuring, Handspring reported a pro forma loss of $10 million, or 7 cents per share, for the quarter ended Sept. 28.
Analysts were expecting the company to post a pro forma loss of 9 cents a share, according to First Call.
"This quarter we moved our strategy forward to focus more on carrier partnerships and wireless communicators," Handspring CEO Donna Dubinsky said in a statement. "A strong launch of the Treo 300 combined with significant expense reduction resulted in sequential growth and a good overall quarter."
Handspring revised its guidance for the second quarter, forecasting revenue to be between $54 million and $60 million. In July it had forecast second-quarter revenue to be in the range of $80 million and $90 million.The company also pushed back its timeframe for reaching profitability from the end of this year to the second half of 2003.
Handspring has been focusing on the Treo line of communicators and de-emphasizing its Visor handheld line. Despite a slumping market for handheld devices, the company sold 44,000 Treo units in the quarter, more than what it sold in the previous two quarters put together, Dubinsky said.
"The transition is working," Dubinsky said.
She added that the company will continue to work with wireless network carrier Sprint, which buys the Treo 300 devices from Handspring and sells them through its retail channels. Deals with two other carriers are also in the works.
Issues involving real-estate leases will likely have a major affect on Handspring's cash resources. The company has signed leases for real estate that it no longer needs.
"As a result of either subleasing the buildings, or a buyout or restructuring of the leases, we anticipate taking a significant, one-time charge relating to these buildings in the December quarter of fiscal 2003," Handspring said in a filing with the Securities and Exchange Commission.
Dubinsky said the potential cash impact for rent in the quarter would be around $2.8 million.
Handspring had cash and cash equivalents of $58.8 million as of Sept. 28. It had $85.6 million in late June, the end of its fourth-quarter fiscal year 2002. It has $118 million in cash and investments, of which $73.8 million was unrestricted.
Handspring shares closed up about 7 percent, or 5 cents, at 75 cents per share. In after-hours trading, shares were up about 5 percent, or 4 cents, at 79 cents.