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Palm Profits Down as Delay in New Treo Crimps Sales

Handheld computer and smart phone maker Palm reported a lower quarterly profit as revenue was hit by a shipping delay of its new Treo 750 device in the United States and costs rose.

Palm said after markets closed Tuesday that it had net income for its fiscal second quarter ended Nov. 30 of $12.8 million, or 12 cents a share, compared with a net profit of $260.1 million, or $2.51 a share, a year earlier, when it had a large tax benefit. Revenue declined 12% to $392.9 million.

Excluding items, Palm said it had a profit of 17 cents a share. Analysts polled by Reuters Estimates expected a profit of 15 cents a share, on average.

Palm late last month cut its revenue and earnings-per-share forecast, citing a delay in shipping the latest Treo. Palm said then it expects to ship the Treo 750 early in its fiscal third quarter instead of the second quarter, when it expected sales of the new Treo would boost sales.