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Palm (PALM) got hit in yesterday's after-hours session after announcing its third-quarter earnings report to Wall Street. According to BusinessWeek, an adjusted loss of 61 cents per diluted share was recorded on the bottom line. Analysts thought the loss wouldn't be so severe; they projected red ink of 42 cents per share.
Shares of Palm were down over 15% in extended trading. That's enough to scare any shareholder into rethinking the investment thesis with this business.
If you look at the corporate press release, you'll catch some typical comments from management. The team is disappointed, of course, but the powers that be believe in their products and their sales models. They would naturally advise investors to remain patient while they sort everything out.
Palm certainly has its challenges. Google's (GOOG) Android platform is providing competitive pressures. So too is Research in Motion's (RIMM) BlackBerry device.
These are strikes against the stock, but know what the biggest one for me is? The technical weakness of the stock. Then again, I doubt I'm the only one who counts that as the biggest factor. Let's face it, when you look at the six-month chart, you can't possibly feel good about it.
Naturally, there will be contrarians who will say that buying low is the way to go and that longer-term thinking is required. Yes, that oftentimes is the case. But I'd rather see some profits before I consider starting a position in Palm (or, at the very least, a dose of technical strength would be nice).
Disclosure: I don't own any company mentioned; positions can change without notice.
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