Palm posts loss as rivals gain

Palm Inc., maker of the Treo e-mail phone, posted its third straight quarterly loss as customers defected to Apple Inc.’s iPhone and BlackBerrys made by Research in Motion Ltd.

The fiscal third-quarter loss was $31.5 million, or 30 cents a share, compared with a profit of $11.8 million, or 11 cents, a year earlier, Palm said. Revenue fell 24% to $312.1 million, missing analysts’ estimates.

Sunnyvale, Calif.-based Palm slashed jobs and closed its retail stores in the quarter ended Feb. 29 to curb costs as sales declined. The company has failed to update its product designs fast enough to compete with the BlackBerry or the iPhone, introduced in June.

“The numbers are a little disappointing,” said James Faucette, an analyst at Pacific Crest Securities in Portland, Ore. “They need to refresh the Treo lineup as quickly as possible.”

Palm plans to introduce new Treo phones this summer to help lift its sales, Chief Executive Ed Colligan said.

Excluding stock-based compensation expenses, the loss was 16 cents a share, compared with the 15-cent average estimate in a Bloomberg survey of analysts. Sales estimates averaged $316.1 million.

Palm, which closed up 17 cents at $4.72 before the earnings news, fell 12 cents, or 2.5%, to $4.60 in extended trading.