Markets & Finance

Robbie Stephens Downgrades Palm Rating


Palm Inc. (PALM) posted $0.02 Q3 earnings per share and lowered guidance for Q4. Robertson Stephens downgraded its rating on the shares to long-term attractive from buy.

Analyst Eric Rothdeutsch says Palm's Q3 results were in line with expectations. He also says the lower Q4 guidance is due to a weak macro environment and reduced consumer spending. Although he remains convinced of the company's solid product positioning, and its roadmap moving forward, the analyst downgraded the shares as a result of a sharp drop-off in demand coupled with ballooning inventory levels. Rothdeutsch cut his $0.13 fiscal 2001 (May) EPS estimate to $0.03 and his $0.19 fiscal 2002 EPS forecast to a $0.05 loss per share. Rothdeustsch feels that Palm has a large enough cash balance to weather the storm until demand in consumer spending improves.


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