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Palm posts US$172 million Q3 loss

Palm Inc., the world's largest maker of handheld computers, had a US$172.3 million loss in the third-quarter as the company fired workers and sales dropped for a second consecutive quarter.

The net loss was US$5.93 a share in the quarter ended Feb. 28, compared with profit of US$2.95 million, or US$0.10, a year earlier, Palm said in a statement. The computer maker's sales, which have dropped in seven of the last eight quarters, fell 29 percent to US$209 million from US$292.7 million a year earlier.

As businesses cut costs to cope with a decline in their profits, demand has weakened for Palm's most expensive handheld computers, such as the US$549 Tungsten W that doubles as a cellular telephone. Palm lowered price on several models by as much as 20 percent to attract buyers as sales trailed forecasts.

"We are disappointed that we fell short of our original financial forecasts,'' chairman and chief executive Eric Benhamou said during a conference call.

Shares of Palm, which lowered its forecasts earlier this month, dropped US$0.59, or 5.4 percent, to US$10.30 in after-hours trading following the release of the results.

Sales of handheld computers have slumped across the industry. According to market researcher Gartner Inc., sales of the devices dropped 9.1 percent last year.
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