Palm lowers 2Q guidance

Published: November 29, 2006

San Jose, CA (AP) – Palm Inc. on Monday slashed its fiscal second-quarter earnings
targets, blaming a delay in the U.S. launch of a new Treo smart phone.

For the quarter ending Friday, the Sunnyvale-based handheld-device maker said
it now expects earnings to be 10 cents to 11 cents per share on revenue between
$390 million and $395 million. The company had earlier projected earnings of
15 cents to 18 cents per share on revenue of $430 million to $450 million.

Excluding one-time items, Palm now expects earnings of 15 cents to 16 cents
per share, compared to its earlier forecast of 20 cents to 23 cents per share.

On that basis, analysts were forecasting earnings of 22 cents per share and
sales of $442.5 million, according to a survey by Thomson Financial. Palm had
expected its second-quarter results would include U.S. shipments of the new
Treo 750, but delays in certification have pushed the phone’s release into
the third quarter, the company said.

Palm will report second-quarter results on Dec. 19.