Trouble On The Horizon For Palm?



In its first earnings release since being spun off earlier this month from 3Com Corp., Palm Inc. reported third-quarter net income of $11 million, or 2 cents a share, an increase of 66% from the year-earlier period when it reported net income of $6.6 million.

Excluding costs associated with its separation from 3Com, Palm's earnings for the quarter, ended Feb. 25, were $15.5 million, or 3 cents a share. Palm's revenues for the quarter were $272.3 million, up from $125.9 million a year ago.

The company may have trouble sustaining such rapid growth. Palm CFO Judy Bruner, speaking after the close of financial markets in New York, warned investors that the explosion in wireless and mobile computing is causing a component shortage. "Component supply will be tight through at least the first half of 2001," said Bruner, though she did not specify which components are in short supply.

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