Palm's financial results for this most recent quarter seem pretty grim to somebody who hasn't been watching the company too closely. Though Palm does not provide guidance for how they expect their quarters to look, as Jennifer reported yesterday many were expecting a big loss. Palm did indeed lose money last quarter, $43.4 million on $296.2 of revenue. During the previous quarter they lost $31.5 million on $312.1 million in revenue. Smartphone sell-through for the quarter reached a record high, totaling 968,000 units, up 29 percent year over year.

"We continue to invest in Palm's future and remain focused on building long-term value," said Ed Colligan, president and chief executive officer for Palm, Inc. "Centro is a tremendous hit, we are gaining market share, and we believe with this momentum, and the launch of new Windows Mobile products, we will turn the corner and return to revenue and margin growth."

The reason that these numbers aren't as grim as they seem on the surface is that Palm themselves had warned of another rough quarter during their last call, saying that their 'new high end Windows Mobile Treo' would hit by 'the end of summer' but not during this previous quarter.

Palm also released their report for the entire fiscal year, reporting that Net revenue was $1.32 billion, "Smartphone sell-through for the full year reached a record high, totaling 3.2 million units, up 19 percent year over year," and "Net loss applicable to common shareholders for fiscal year 2008 was $110.9 million, or $(1.05) per diluted share.

Palm is still excited about the future, however, given that they will finally be releasing the Treo 800w (expected on July 13th) and development on their next-generation mobile OS is continuing apace. Their losses also sting a little less because of their deal with the Elevation Partners investment group, a private equity firm that's helping Palm stay afloat during these rough times.

Still, however, the numbers are disheartening. With the incredible growth in the smartphone market, it seems like even with their challenges Palm should be able to bring in more than they have. Research in Motion, the makers of the BlackBerry, this week reported that their profit and revenue doubled when compared to last year, raking in $482.5 million on $2.24 billion in revenue. RIM also added 2.3 million new BlackBerry subscribers in the last quarter, further bolstering their lead in North American smartphone market share.

With any luck, Palm's incredible sales of the Centro will eventually mean a profit, assuming they're able to use economies of scale to reduce manufacturing costs to the point where the Centro's low price doesn't necessarily mean razor-thin (or negative) margins. It has already helped Palm pick up a few points of marketshare, they're up to 13.4% of the US market. Palm has also stated that they expect to sell 2 million Centros in 2008. Worldwide, however, the numbers are a bit more grim, marketshare-wise

Update:Paul wrote in with a couple interesting notes:

There are two major tidbits from Palm's results that you didn't mention in your TreoCentral.com article, but merit reporting...

Sales are down 25% from about $400 million last year to just under $300 million this year...

What's even more alarming is that total stockholders' equity has plummeted from $1 billion last year to just $100 million (scroll down to the balance sheet)...

Paul's right, of course, and as he said, it's alarming indeed. I'll quote what I sent back to him:

Palm is mostly in serious trouble. They're trying to shoot the moon right now, collecting quarter after quarter of deadly spade cards in the hopes that their new OS and devices in 2009 will shock the world. We'll see. Meanwhile bad quarters don't mean as much as they might since they have a private equity firm that believes in them and is willing to ride out the storm.

SUNNYVALE, Calif., Jun 26, 2008 (BUSINESS WIRE) -- Palm, Inc. (Nasdaq:PALM) today reported that total revenue in the fourth quarter of fiscal year 2008, ended May 30, was $296.2 million. Smartphone sell-through for the quarter reached a record high, totaling 968,000 units, up 29 percent year over year.

"We continue to invest in Palm's future and remain focused on building long-term value," said Ed Colligan, president and chief executive officer for Palm, Inc. "Centro is a tremendous hit, we are gaining market share, and we believe with this momentum, and the launch of new Windows Mobile products, we will turn the corner and return to revenue and margin growth."

Net loss applicable to common shareholders for the fourth fiscal quarter was $43.4 million, or $(0.40) per diluted share. Net loss applicable to common shareholders included stock-based compensation of $5.5 million, amortization of intangible assets of $0.9 million, restructuring charges of $1.3 million, impairment of non-current auction rate securities of $6.7 million and accretion of series B convertible preferred stock of $2.4 million. This compares to net income for the fourth quarter of fiscal year 2007 of $15.4 million, or $0.15 per diluted share, which included stock-based compensation of $5.4 million and amortization of intangible assets of $1.0 million.

Net loss for the fourth fiscal quarter, measured on a non-GAAP(1) basis, totaled $23.9 million, or $(0.22) per diluted share, excluding stock-based compensation, amortization of intangible assets, restructuring charges, impairment of non-current auction rate securities and accretion of series B convertible preferred stock and adjusting the related income tax provision to 40 percent. This compares to non-GAAP net income for the fourth quarter of fiscal year 2007 of $17.8 million, or $0.17 per diluted share, which excluded the effects of stock-based compensation, amortization of intangible assets and adjusting the related income tax provision to 40 percent.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the fourth fiscal quarter totaled negative $40.4 million. EBITDA, adjusted to add back stock-based compensation, other non-operating expense, restructuring charges and impairment of non-current auction rate securities, or Adjusted EBITDA, totaled negative $26.4 million.

Fiscal Year 2008 Results

Revenue for the full fiscal year 2008 was $1.32 billion. Smartphone sell-through for the full year reached a record high, totaling 3.2 million units, up 19 percent year over year.

Net loss applicable to common shareholders for fiscal year 2008 was $110.9 million, or $(1.05) per diluted share. Net loss applicable to common shareholders included stock-based compensation of $31.1 million, amortization of intangible assets of $3.8 million, patent acquisition cost of $5.0 million, restructuring charges of $30.4 million, gain on sale of land of $4.4 million, impairment of non-current auction rate securities of $32.2 million and accretion of series B convertible preferred stock of $5.5 million. This compares to net income in fiscal year 2007 of $56.4 million, or $0.54 per diluted share, which included stock-based compensation of $24.3 million, amortization of intangible assets of $2.0 million and in-process research and development of $3.7 million.

Net loss for fiscal year 2008, on a non-GAAP basis, totaled $36.2 million, or $(0.34) per diluted share, excluding stock-based compensation, amortization of intangible assets, patent acquisition cost, restructuring charges, gain on sale of land, impairment of non-current auction rate securities and accretion of series B convertible preferred stock and adjusting the related income tax provision to 40 percent. This compares to non-GAAP net income in fiscal year 2007 of $73.4 million, or $0.70 per diluted share, which excluded the effects of stock-based compensation, amortization of intangible assets and in-process research and development and adjusting the related income tax provision to 40 percent.

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