Palm narrows quarterly loss

Higher selling prices and cost controls reduce predicted losses for Q1

Palm has reported a narrower than expected loss for the first quarter of its 2004 fiscal year, helped by higher average selling prices for its products and tight inventory and cost controls.

The handheld computer and software vendor reported a loss of $21.75m for the three month period ended 29 August. That compares with a $258.75m net loss in the year-earlier period, Palm said in a statement.

Excluding costs related to restructuring and other special items, Palm's loss was $16.9m, or $0.58 cents a share, beating the consensus estimate of $0.83 per share from six analysts polled by Thomson First Call. In the year-earlier period Palm reported a loss excluding special items of $36.44m, or $1.26 a share, it said.

Revenue for the quarter rose 3 percent to $177.4m, from $172.3m a year ago, the company said. Revenue was below the consensus estimate of five analysts polled by Thomson First Call of $185.4m.

Palm is in the process of acquiring rival Handspring and plans to spin off PalmSource later this year. Following the spin off, Palm's hardware company will be renamed palmOne, the company has said.

Joris Evers writes for IDG News Service

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