Palm beats 3Q estimates, sees slower growth ahead

After market close Tuesday, the maker of handheld computers reported pro forma fiscal third quarter net income of $15.5 million, or 3 cents per share, excluding one-time events. First Call_s survey of six analysts predicted a profit of a penny per share for the quarter ended Feb. 25. Including $8.2 million in separation costs, Palm earned $11 million, or 2 cents per share. Shares of Palm rose as high as 56 3/8 in afterhours activity on the Island electronic communications network, although the price retreated from that level subsequently. The stock closed Tuesday_s regular trading at 54 13/16, down 9/16 for the session. Third quarter revenue increased $272.3 million, up 116 percent from $125.9 million in the year ago period, and a 5 percent gain sequentially. Palm expects fourth quarter revenue ranging between $280 million to $295 million, or year-over-year growth of 61 to 69 percent. Fiscal 2001 will likely see growth between 40 and 45 percent.