Palm has reported a loss in the financial second quarter of 2007, failing to meet even down-sized Wall Street expectations.

Palm lost $9.63 million, or 9 cents per share, on revenue of $349.63 million in the three months ended November 30th.

To put these results in perspective, this time a year ago, Palm earned $12.77 million on revenue of $392.91 million.

"We are transforming Palm to exploit the market opportunity and instilling operational rigor throughout the organization", Palm CEO Ed Colligan said in a statement.

Palm has struggled in the face of increased competition in its sector, including the much hyped launch of Apple's rival iPhone smartphone that launched in the States in June.

In an attempt to turn things around in the second quarter Palm cancelled the launch of the "Foleo" mobile companion, launched a low-end handset, the Centro, aimed at the younger market and sold a stake of the company to private equity firm Elevation Partners.

But the losses are set to continue for the immediate future - Palm revealed it expects to lose $7 million to $10 million in the current quarter, and has implemented a job cut plan to try and save money.