The stock fell more than 14% in after-hours trading after the company issued a sales and profit forecast for the current quarter that lagged analysts' estimates. Palm shares dropped $5.06 to $22.91.
Sunnyvale, Calif.-based Palm (PALM: news, chart, profile) reported fiscal first-quarter net income of $18.2 million, or 35 cents a share, down from $19.6 million or 38 cents a share last year.
Sales rose 25% to $342.2 million for the period ended Aug. 31, helped by higher sales of the Treo Smartphone.
shares fell 17.2% after the company reported that net income slipped 7% from a year ago, as higher costs undercut stronger sales of its handheld-computing products"Our share in the handheld-computer market rose," Palm Chief Executive Officer Ed Colligan said in a statement. "We're excited about our overall product road map."
However, Palm forecast second-quarter revenue of $435 million to $440 million. That's lower than analysts' estimates of $450 million, according to Thomson First Call.
In a conference call, Palm executives said international business wasn't as strong as they had hoped, especially in Europe where it faces competition from Ericsson, Nokia Corp. and Sony Corp.
Management added that the overall handheld-device market has struggled, but that its LifeDrive product launched three months ago has done "fairly well." marketwatch CBS
