Untrained Eye POV-Palm Fiscal Year 2010 Q1 Results: Do They Have Enough Cash to Last Until the end of 2010?

Sprint and Palm bet the farm on the Palm Pre to shake up the cell phone world and give the iPhone some real competition. The Pre didn’t turn out to be an iPhone-killer. It seems to be doing well. But, is it doing enough to save the farm? Let’s take a quick look at…

Palm Reports Q1 FY 2010 Results

…with an average guy untrained financial eye (mine).

– 823,000 smartphone units sold during the first quarter of fiscal year 2010 (which ended on Aug. 28, 2009). That doesn’t sound like a lot of phones to me

net loss applicable to common stockholders for the first quarter of fiscal year 2010 was $(164.5) million This, apparently, is less of a loss than analysts expected. But, it still doesn’t look good to my untrained eye

The company’s cash, cash equivalents and short-term investments balance was $211.8 million at the end of the first quarter of fiscal year 2010. Cash used in operations for the first quarter of fiscal year 2010 was $45.1 million. So, they burned through $45.1 million during the last quarter and have $211.8 million in cash (or its equivalent). What does this mean? In the unlikely event that their burn rate is linear, they have enough cash to last through the Fall of 2010. It looks to me like Palm needs a huge holiday sales period to remain healthy enough to get to the end of calendar year (not fiscal year) 2010.