Palm acknowledges added $25 million loss

Palm Inc. yesterday reported a loss of $57 million in its fiscal quarter ended Feb. 28, $25 million more than its previous quarterly report last month. That’s markedly down from the $11.8 million earned in the year-ago quarter.
The company took an added $25 million write-down for losses in value of its holdings in auction-rate securities, whose interest rates are periodically set by auction. Credit agencies have downgraded the insurers who back those bonds, collapsing the market for such securities.
Palm said yesterday its auction-rate securities holdings had lost value to the tune of $39 million, of which nearly $14 million was deemed temporary — thus the additional $25 million write-down. The data came to light in the company’s quarterly 10Q report to the Securities and Exchange Commission.
Palm is seeking to develop a new mobile platform to follow-up its aging Treo smartphone line and, in the interim, has shifted focus to its Centro smartphones, of which it has sold a million units. But Centro margins are slim and have not returned Palm to profitability.
Focusing on the Centro, which is billed as a social networking device, rather than the Treo and its buttoned-down enterprise following, may be blurring Palm’s brand.
The vendor’s Web site today touted:
“Palm Centro: it’s not for meetings, it’s for meeting up.” And: “Your shortcut to happy hour. Life begins after five o’clock.”