CEO to Leave PalmOne After Leading It to Profit
PalmOne Inc. said Monday that Chief Executive Todd Bradley, who oversaw the company’s return to profitability, would resign. The company’s shares fell 11% on the news.
PalmOne, which makes the Treo mobile phone and hand-held computer, said company President Ed Colligan, 43, would become interim CEO. A search is underway for a permanent replacement, and Colligan is a candidate.
Colligan, who joined PalmOne in 2003, ran the wireless unit until he became president in June. He spearheaded efforts to boost sales of mobile phone devices as demand for Palm hand-held computers diminished. Bradley, 46, presided over three straight quarters of profit after more than a year of losses for the Milpitas, Calif.-based company.
“Colligan is very well-known and respected,” said Pablo Perez-Fernandez, a Stanford Group analyst. He’s “the wireless guy, and that’s where the company’s future is.”
The company’s shares fell $2.84 in extended trading. They had declined $1.22 to $26.59 in regular Nasdaq trading.
“There’s always uncertainty and speculation whenever a CEO resigns suddenly; that’s what you’re seeing in the shares,” Perez-Fernandez said. “If there’s no problem, then it’s a good deal Colligan is in the running.”
Bradley, who became CEO in October 2003, said the company’s financial position “is as strong as it’s ever been.”
“There’s a number of things I’ve been thinking of doing,” Bradley said. He declined to outline his plans and said he had been discussing departure plans with the board for “some time.”
Speculation his move may be related to the company’s finances is “foolishness,” he said.
Bradley will remain CEO until the end of this quarter, which ends Feb. 25, and be an advisor through May.
Colligan was president and chief operating officer of Handspring Inc. before PalmOne purchased it in October 2003. PalmOne, then called Palm Inc., made the acquisition to expand into wireless-calling devices as Palm sales dropped.
Bradley joined Palm in June 2001 as chief operating officer of the Palm Solutions Group. Palm was renamed PalmOne when it bought Handspring and spun off the software unit.
Under Bradley, PalmOne snapped a five-quarter streak of losses amid rising demand for its Treo line of “smart phones,” which can access the Internet.
On Dec. 16, the company said profit and sales this quarter might miss the estimates of analysts, who expected higher demand for the newest version of the Treo.
PalmOne is increasing spending on its Treo products to battle Waterloo, Canada-based Research in Motion Ltd., maker of BlackBerry devices, as well as Schaumburg, Ill.-based Motorola Inc. and Nokia Corp. of Finland for market share.
