SANTA CLARA, Calif.-Just after the close of trading on Wall Street, Palm Inc. dropped its revenue expectations for the quarter by about $70 million and said it would not turn a profit as it had expected.
The news alarmed investors and analysts, causing the company’s stock to drop by almost 50 cents per share after the news. The company’s stock was trading at about $1.75 per share Friday, near its 52-week low. Further, CIBC World Markets downgraded the company.
In its announcement, Palm lowered its forecast for the quarter, ended March 31, from about $300 million to about $230 million.
“Demand in spring did not materialize as we had previously expected, but rather market conditions deteriorated compared to both the year-ago quarter and recent months,” said Eric Benhamou, the company’s chairman and chief executive officer. “While we remain optimistic about the long-term growth opportunities in the sector, we are disappointed that we will not meet our revenue and profitability goals this quarter.”
Palm sought to offer a bright side to the news by pointing out its U.S. market share in the device and operating system business grew during the past three months.
