Palm Inc faces loses in fiscal first quarter

Smart phone maker Palm Inc. experienced a small loss in its fiscal first quarter as it faced stiffening competition.

Photo: Palm Inc faces loses in fiscal first quarter

In the three months ended Aug. 31, Palm said it lost $841,000 (590,921.87 EUR), or a penny per share, on revenue that rose 1 percent to $360.8 million (253.51 million EUR). In the year-ago period, Palm earned $16.5 million (11.59 million EUR) on revenue of $355.8 million (250 million EUR).

Excluding one-time items that included $5.1 million (3.58 million EUR) in stock-based compensation expenses, a $5 million (3.51 million EUR) patent-acquisition cost and $6.6 million (4.64 million EUR) in restructuring charges, the Sunnyvale-based company said it would have earned $9.7 million (6.82 million EUR), 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 (253.16 million EUR).

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 (259.98 million EUR) and $380 million (267 million EUR). 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 (290.54 million EUR), 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.

Shares of Palm closed down 27 cents to $16 on Monday and fell another 4 percent, or 61 cents, to $15.39 in extended trading following the report.