Treo delay to knock Palm's profits

Handheld maker Palm said a delay in US 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 1 December, to be in the range of $390m to $395m, as compared with prior estimates of $430m to $450m provided on 21 September. Profits will also fall short of estimates, Palm said, with per-share profits expected to be 10 cents to 11 cents, versus prior estimates of between 15 cents and 18 cents.

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Palm chief executive Ed Colligan said in a statement: "Smart-phone sell-through across our existing products is strong. 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 US 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 US. Individual cellular carriers also have their own certification processes. The Treo 750 appears to have received FCC approval on 8 November, according to the agency's website.

A Palm representative said the delay refers to approval from its initial US 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 website.

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 1 December, Palm said last week.

Ina Fried writes for CNET News.com