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Palm warns of profit drop

Declining PDA sales hit Palm's quarterly earnings

After cancelling the controversial Palm Foleo and continuing to struggle with a shift away from the PDA market, Palm warned yesterday that its upcoming earnings report could be weaker than expected.

For the quarter ending 31 August, Palm will lose $0.01 per share or break even, the company said. Earlier, the company had said it expected a loss of $0.01 or a gain of $0.01 in the period. That compares with a gain of $0.35 per share in the same quarter last year.

Palm also narrowed its revenue forecast to between $359m and $361m, instead of the previously expected $355m to $365m.

Palm will release its quarterly earnings report on 1 October.

The company is facing challenges as it changes its business from one focused on PDAs to one that specialises in smartphones. Earlier this month, Palm announced that it wouldn't ship the Foleo, a companion product to its Treo smartphone, as planned. When the device was announced, analysts said the Foleo would be too expensive and wouldn't offer valuable features. Palm said it decided to focus instead on its own software platform that is due out in 2008 or 2009.


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