Question: which companies stock has quadrupled this year? Answer: not very many, but Palm is one of them. Today earnings came in from Palm, far better than expected, losing only 40 cents per share, far below the expected 65 cents per share loss that analysts feared. Of course, the resurgence of Palm is quite tied to the possible success of the Pre, which is the visible and much kicked horse in the room.
The Palm launch was generally considered a success, with few hiccoughs other than tight supply. If Palm can convert this burst of success and reach profitability in the current quarter, Apple will have a recapitalized foe with a strong contender for one of their crown jewels. If Palm’s costs spiral and losses step up, a declining stock price will make finding capital to support any real R&D difficult.
It all rests on the Pre, can it pull its parent company from a (shrinking) sea of red ink? Investors seem to think so.
