- The revenue decline vs. the company’s Q1 fiscal year 2009 and Q2 fiscal year 2008 is a result of reduced demand for maturing smartphone and handheld products.
- Guides Q2 GM 18-19%
- To record a Q2 charge related to inventory component purchase of $10-15M.
- To also record a valuation allowance on its US deferred tax assets of about $400M in Q2.
- Back on 9/18, the company guided Q2 sales down sequentially from Q1's $367M
- The company plans to reduce its US workforce
- Plans to consolidate its European operations
- Shifting responsibility for Asia Pacific sales, marketing and administrative support ot its US offices.
- The company expects that by Q4 fiscal year 2009, these actions and other cost-savings initiatives will reduce quarterly operating expenses by approximately $20M vs. Q1 fiscal year 2009 levels.
- Company Comments: We are seeing unprecedented dynamics in the global markets as economic uncertainty hampers demand for consumer products, said Ed Colligan, Palm’s president and chief executive officer. In order to ensure Palm’s long-term success during these uncertain times, we’re taking several steps to significantly reduce our cost structure. These measures will help us navigate this difficult period while launching our next-generation products as planned.
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