Betting the Company

Eric Savitz on Palm:

The company this afternoon said it expects to post revenue for its fiscal third quarter ended February 27 of $85 million to $90 million, well below the Street consensus of $157.8 million, and down 71%-73% from a year ago. […] Palm said cash used in operations in the quarter will be $95 million to $100 million, which bring its total cash position down to $215 million to $220 million. Palm said that should be enough cash to meet working capital under its current operating plan — but that it nonetheless is evaluating options for raising more cash.

“Betting the company” is an overused cliché, but in Palm’s case it’s true. They need the Pre to ship on time and they need it to be a hit.

The other interesting tidbit is that Palm will be accounting for Pre revenue on a 24-month subscription basis, just like Apple does with the iPhone.

★ Tuesday, 3 March 2009