Investors trashed device maker PalmOne Inc. following lower-than-expected forecasts for the critical holiday shopping season, sending the company’s shares down almost 20 percent to around $34.18 per share.
Three out of four investment firms have downgraded their opinions of the company during the past week. Bear Stearns now rates the company’s stock as an “underperform.”
PalmOne reported solid second-quarter revenues, but offered forecasts for its third quarter that were well below analyst expectations. According to reports, PalmOne said it expects sales of about $280 million in its upcoming third quarter, which is well below the $318 million expected by an average of analysts polled by Thomson First Call. Much of the company’s hopes are based on sales of its Treo smart phone.
PalmOne said it won’t score a boost in revenues until its fourth quarter, when it expects to sell its new Treo 650 through additional wireless carriers. Sprint is so far the only carrier in the United States to carry the device.
In its second quarter, PalmOne reported revenues of $376 million, up from the $271 million it reported during the same quarter a year ago. The company’s net income was $24.7 million, also up from the $2.6 million it reported during the same quarter a year ago.
