Smartphone vendor Palm disappointed investors with release of its fiscal second quarter results yesterday, sending its shares down 4 percent last night to US$11.25 in after-hours trading. For the quarter ended November 27, Palm reported losses (after paying preferred dividends) of US$85.4 million, or US$0.54 per share, compared with a year-earlier loss of US$508.6 million, or US$4.64 per share. Last year’s results included a charge of $396.7 million to write down the value of assets. Analysts were expecting a much smaller loss of US$0.32 per share on revenue of US$266.2 million. Instead, revenue came in at US$78.1 millon, a slide of 59 percent year-on-year.

Worringly for the company – which has this year undergone an overhaul and launched new high-profile products such as the Pre and Pixi – actual sales of smartphones in the second quarter fell 4 percent year-on-year and 29 percent from the first quarter, totalling 573,000 units. Smartphone shipments rose 41 percent year-on-year (but fell 5 percent from the previous quarter) to 783,000 units. Palm’s chairman and CEO, Jon Rubinstein, put a brave face on the performance. “We are continuing to execute strongly against our long-term strategy with the delivery of Palm Pixi, the new carrier launches completed this quarter, and the upcoming opening of Palm’s full developer program,” he noted in a statement. “We’re still in the early stages of a long race, and we’re energized by the opportunity to compete in this exciting market. We remain confident that Palm’s innovative product design capabilities, integrated cloud services and the differentiated and delightful Palm webOS experience will provide the foundation for our sustained success.” Separately, reports overnight have suggested that Palm will likely announce plans for Verizon Wireless to sell one of its phones at the Consumer Electronics show in January, according to analysts who also expect a new phone launch at the show.