Shares of struggling Palm Inc. fell more than 4 percent Monday after the Treo smart phone's maker said it swung to a small loss for its fiscal first quarter and forecast lower-than-expected results for the current quarter. Faced with stiffening competition, Palm said it lost $841,000, or a penny per share, on revenue that rose 1 percent to $360.8 million in the three months ended Aug. 31. In the year-ago period, Palm earned $16.5 million on revenue of $355.8 million.
Palm also issued a weak outlook. For its fiscal second quarter, Palm said it expects a loss of 3 cents to 1 cent per share on revenue between $370 million and $380 million, probably caused by increased competition over the past year - most notably from Apple Inc.'s foray in late June into the smart phone market with its iPhone. Playing a bit of catch-up to its rivals, Palm last week unveiled a thinner and more affordable smart phone. The Centro, Palm's first major hardware redesign in years, will cost $99 with a two-year service contract when it becomes available later this month.
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