Treo delay dents Palm earnings

Company says results will fall short of estimates because it won't be able to ship its Treo 750 on time in the U.S.

Handheld maker Palm said Monday that a delay in U.S. certification of its latest Treo will cause current quarter sales and profits to fall short of estimates.

In a statement, Palm said it now expects revenue for its second fiscal quarter, ending December 1, to be in the range of $390 million to $395 million, as compared with prior estimates of $430 million to $450 million provided September 21. Earnings will also fall short of estimates, Palm said, with per-share earnings expected to be 10 cents to 11 cents, versus prior estimates of between 15 cents and 18 cents.

"Smart-phone sell-through across our existing products is strong," Palm Chief Executive Ed Colligan said in a statement. "However, our (current quarter's) revenue will be constrained by a delay in certification of a key product." The company said it now expects to start shipping the Treo 750 in the U.S. early next quarter, the company's third fiscal quarter.

Colligan said the "Treo 750v launch in Europe is doing quite well, and we expect international revenue (this quarter) to be strong."

New cell phones require approval from the Federal Communications Commission before they can be sold in the U.S. Individual cellular carriers also have their own certification processes. The Treo 750 appears to have received FCC approval on November 8, according to the agency's Web site.

A Palm representative said the delay refers to approval from its initial U.S. carrier. Palm did not name the carrier in question, although various enthusiast sites have posted pictures of a Cingular-branded Treo 750 and Cingular itself has included the Treo 750 on a rebate form posted on its Web site.

The 750 was first shown off in September in London, along with cellular carrier Vodafone. Palm unveiled another Treo, the lower-end Treo 680, in October. That model is expected to start shipping after December 1, Palm said last week.

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