Palm posts loss amid stiffer competition

updated 7:48 a.m. ET Oct. 2, 2007

SAN JOSE, Calif. - Struggling Treo smart phone maker Palm Inc. swung to a small loss Monday for its fiscal first quarter as it faced stiffening competition.

In the three months ended Aug. 31, Palm said it lost $841,000, or a penny per share, on revenue that rose 1 percent to $360.8 million. In the year-ago period, Palm earned $16.5 million on revenue of $355.8 million.

Excluding one-time items that included $5.1 million in stock-based compensation expenses, a $5 million patent-acquisition cost and $6.6 million in restructuring charges, the Sunnyvale-based company said it would have earned $9.7 million, or 9 cents per share.

On that basis, Palm beat Wall Street’s expectations. Analysts polled by Thomson Financial expected the company to report adjusted earnings of 8 cents per share on sales of $360.3 million.

Palm also issued a weak forecast Monday. 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. On an adjusted basis, it expects earnings of 6 cents to 8 cents per share.

Analysts were projecting adjusted earnings of 11 cents per share on sales of $413.5 million, according to Thomson Financial.

Palm has battled 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.

MORE FROM EARNINGS

Earnings Section Front

Ford posts $8.67B loss, looks to small cars Dow Chemical profit sinks 27 percent Southwest profit rises on fuel savings Yahoo CEO: 'This company is doing just fine' Costco warns profit is ‘well below’ estimates McDonald’s sees profits; changing dollar menu AT&T shares soar after earnings rise 30 percent Yahoo profit falls 19 percent in second quarter Pfizer profit doubles on drug sales, lower costs Boeing profit falls on military plane charge Earnings Section Front   Add Earnings headlines to your news reader: