Palm Posts Loss Amid Slowing Demand

Palm Inc. reported a fiscal first-quarter loss on slowing demand for its hand-held computers and said it probably will not turn a profit in the second quarter as it had hoped.

Revenue plunged 47% in the last quarter ended Aug. 31, and the company said revenue in the current quarter will be significantly lower than Wall Street projections.

The Santa Clara, Calif.-based company posted an operating loss of $38.7 million, or 7 cents a share, compared with profit of $23.9 million, or 4 cents a share, a year ago. Analysts were expecting a loss of 9 cents, according to Thomson Financial/First Call.

Palm said it sees second-quarter revenue as “flat to up” from the first quarter’s $214 million, contrasted with analyst expectations of $421 million.

The company said it very cautiously views its outlook for the September-through-November quarter, traditionally its strongest.

Palm shares closed down 36 cents at $2.15 on Nasdaq before the announcement.