Palm Shares Suffering as Result of Poor Forecast
The poor sales forecast that placed doubts on the prospects of the Palm Pre and Palm Pixi smartphones have caused Palm shares to continue their decline with Palm stock down 2.9% or 19 cents in afternoon trading on Friday following a 19% fall on Thursday reports an article over on onn.tv.
Palm shares were cut to “Sell” from “Neutral” by UBS on Friday and UBS analyst Maynard Um stated Palm would need to lower prices or inject more money into the marketing of their smartphones.
Shaw Wu, an analyst for Kaufman Bros, also lowered Palm’s rating from “Buy” to “Hold” on Friday, and in a note to investors said that he was concerned that Palm may not become profitable until a year or a year and a half from now.
On Thursday, Palm said they expect smartphone sales this year to be “well below” their previous prediction of $1.6 to $1.8 billion, and for the quarter ending February they expect somewhere between $285 million and $310 million while analysts were expecting $424.9 million.