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Palm Inc.’s Q3 revenue off 24 percent

Fri., March 21, 2008

Smart phone maker Palm Inc. fell short of Wall Street expectations Thursday when it reported a 24 percent drop in third-quarter revenue as it continued to push its lower-margin $99 Centro model.

The company lost $31.5 million, or 30 cents per share, compared with a profit of $11.8 million, or 11 cents per share, in the year-ago period.

The company has struggled with stiff competition in the mobile phone market, including the release last June of Apple Inc.’s iPhone, and a company reorganization that started last year.

Revenue for the fiscal third quarter was $312.1 million, compared to $410.5 million a year earlier.

Carnival Corp. said Thursday first-quarter profit fell 17 percent due to rising fuel costs, a drag on operations that also led the world’s largest cruise operator to lower full-year profit guidance.

Net income dropped to $236 million, or 30 cents per share, in the three months ended Feb. 29, from $283 million, or 35 cents per share, a year ago. Sales rose 17 percent to $3.15 billion from $2.69 billion.

The increase in revenue was largely offset by escalating fuel expenses, which cost Miami-based Carnival $156 million, or 19 cents per share, in the quarter. Fuel prices increased 66 percent to $499 per metric ton for the quarter, compared to $301 per metric ton in the prior year, the company reported.

•Motor home manufacturer Winnebago Industries Inc. said Thursday its second quarter profits fell nearly 67 percent as flagging consumer confidence in the economy helped drag down sales of recreational vehicles.

High fuel prices hurt, too. Filling up the tank of one of Winnebago’s largest motor homes would cost more than $400 at Thursday’s prices, about 47 percent more than a year ago, for example. It could cost about $244 to fill up a smaller one.

Net income fell to $2.5 million, or 9 cents a share, for the three months ended March 1, down from $7.5 million, or 24 cents a share a year ago.

FedEx Corp. reported a 6 percent drop in third-quarter earnings Thursday, saying a slow economy and high fuel prices are expected to continue cutting into profits.

The Memphis-based shipper predicted lower fourth-quarter earnings from a year ago, as well as limited earnings growth for its next fiscal year.

FedEx, which is often seen as a bellwether for the U.S. economy, expects the international economy “will continue to expand overall, albeit at a slower rate,” Smith said. “And this will be fueled by the emerging markets.”

Company shares fell 2 cents, or 0.02 percent, to $86.21.


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