Acer settlement lifts PalmSource to quarterly profit

As many of us already know, PalmSource has had its share of financial problems. Lucky for them, Acer was able to come along and inject some cash in all the right places. With the new funding, PalmSource is now back in black - much like the band, AC/DC. ;o)

A November settlement with Taiwan’s Acer helped push PalmSource into the black during the second quarter of its fiscal year, even as shipments of Palm OS-based devices declined compared to the same period last year, the Sunnyvale, California, company said Wednesday.

PalmSource, which licenses the Palm OS operating system to hardware makers, reported net income of $2.1 million on revenue of $19.2 million during the second quarter of its 2005 fiscal year, which ended on Nov. 30. The results mark an improvement over the same period last year, when the company reported a loss of $9.1 million on revenue of $16.7 million.

In a statement, PalmSource said a $2.6 million settlement with former licensee Acer had boosted its second-quarter results. That settlement ended a legal battle between the two companies that began earlier this year over terms of a 2001 licensing agreement. The settlement also releases both parties from the licensing agreement.