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Why Palm's First-Quarter Beat Isn't Enough

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It still lost. And what about next year?

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There was a new guy on my commuter bus and I swear he looked just like Danny Bonaduce from the Patridge Family. I better stop right there -- I'm dating myself.

Asian stocks ended in negative territory. The Hang Seng and the Nikkei were down 0.67% and 0.7%, respectively. European stocks, however, were in positive territory earlier this morning. And here in the US, we're currently trading higher.

Here's what I'm seeing on this fine Friday morning:

Palm, Inc (PALM):
Excluding items, the company known for its Pre smartphones lost a dime a share in its first quarter. That was much better than the $0.25 loss analysts had been looking for.

Some thoughts:

1. The beat is good. But a dime-a-share loss isn't something I'll break out the fancy china for.

2. This line in the release caught my eye:

"Due to the timing and scale of expected product launches in Palm's second fiscal quarter compared to those which took place in Palm's first fiscal quarter, and due to lower anticipated demand for legacy products, the company expects non-GAAP Adjusted Revenues for its second quarter of fiscal year 2010 to be between $240 million and $270 million."


The estimate I'm seeing is for a smidge over $346.8 million.

3. That's a huge profit it's expected to generate next year. (Note sarcasm: Next year's estimate is $0.42.)

4. The firm intends to sell 16 million of its shares. That suggests that management thinks the stock is pretty fairly valued.

Texas Instruments (TXN):
The company announced last night after the close that it intends to up its quarterly dividend from $0.11 to $0.12.

My thoughts:

1. I realize that sounds like the same amount of change you can find under your couch cushion, but it's actually big coin. If you really think about it, the company could have saved that dough or used it in any number of other ways. It's a good sign that it's willing to return it to shareholders.

2. Even beyond that, I continue to like this company. After all, estimates have been on the rise and, as I pointed out in Ticker Shock: Why Texas Instruments Shouldn't Be Ignored, it upped its third-quarter outlook, too.

3. I don't know how many folks will be paying attention given that we're headed into a weekend. But I feel the shares deserve a little goose.

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No positions in stocks mentioned.

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