Analysts, Palm expect loss in fiscal 4th quarter

Palm Inc., which makes the Treo smart phone, reports its fiscal fourth-quarter results on Thursday after the market close. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: During the fourth quarter, Sunnyvale, Calif.-based Palm sold its millionth low-priced Centro device and saw Apple Inc. tweak its iPhone software in a move that could increase competition for consumers using smart phone for business purposes.

At the end of March, Palm said it had sold its millionth Centro -- a milestone reached within less than a year of the device's September release.

And in April, Palm said its third-quarter loss was larger than it initially reported, due to a $25 million write-down for auction-rate securities that lost value since that debt market's February collapse.

Palm said it lost $57 million for the quarter that ended Feb. 28, not $31.5 million as it reported in March.

Also during the quarter, Apple said it was tweaking the iPhone's software to enable the device to work with Microsoft Corp.'s Exchange software, which businesses use widely to handle and secure e-mail.

The move puts the iPhone more in direct competition with Palm's Treo and Research In Motion Ltd.'s smart phones, both of which are popular with business users.

BY THE NUMBERS: In March, Palm said it would stop providing specific guidance for future performance.

Chief Executive Ed Colligan said in a conference call for the company's third-quarter report that the fourth would "continue to be a tough quarter relative to top-line pressure."

Colligan indicated Palm would not return to profitability in the fourth quarter and said he expects things to turn around in the first quarter of fiscal 2009.

Analysts polled by Thomson Financial expect Palm to report a loss of 18 cents per share on $302.1 million in revenue. The estimates generally exclude special items.

ANALYST TAKE: In a recent note to investors, Deutsche Bank analyst Jonathan Goldberg predicted that in the fourth quarter Palm's results will echo the year's earlier quarters with strong unit shipments and weak profitability.

WHAT'S AHEAD: Lehman Brothers analyst Jeffrey Kvaal thinks the company's quarter will benefit from the availability of the Centro through Verizon Wireless and the release of at least two new Treo models.

STOCK PERFORMANCE: Palm's shares have risen about 4 percent since the year began, closing at $6.60 on Tuesday. The stock has traded between $4.21 and $19.23 in the past 52 weeks.