June 26 (Bloomberg) -- Palm Inc. reported a fourth straight quarterly loss after the Treo e-mail phone ceded sales to Research In Motion Ltd.'s BlackBerry. The shares fell in extended trading.

The fourth-quarter loss was $43.4 million, or 40 cents a share, compared with a profit of $15.4 million, or 15 cents, a year earlier, Palm said today in a Business Wire statement. Revenue fell 26 percent to $296.2 million in the three months through May, missing the $302 million average estimate of analysts in a Bloomberg survey.

Demand for the seven-year-old Treo has waned as Research In Motion and iPhone maker Apple Inc. added new features and designs more quickly. The success of the Web-browsing Centro wasn't enough to return the company to profitability because the device has lower margins.

``The turnaround at Palm is dependent upon the introduction of new models,'' Lawrence Harris, an analyst at CL King & Associates in New York, said before the report. He has a neutral rating on the shares and doesn't own any. The Centro ``is generating a lot of volume, but it's not generating a lot of profits.''

Excluding stock-based compensation expenses, the loss was 22 cents a share, compared with the 18 cents estimated by analysts.

Palm, based in Sunnyvale, California, fell 30 cents, or 4.4 percent, to $6.54 on the Nasdaq Stock Market today.

Palm Centro

Palm Chief Executive Officer Ed Colligan introduced the Centro to expand beyond corporate customers and attract more thrifty users. Sprint Nextel Corp. started offering the phone in October, AT&T Inc. began selling it in February, and Verizon Wireless added the device this month. The Centro costs $99 with a carrier contract, about half the price of the Treo.

To curb costs, the company has slashed jobs and closed its retail stores in the past year. Palm plans to add new Treo phones to help lift sales, Colligan, 47 said in March.

The devices will face fresh competition from a faster iPhone, which goes on sale for $199 next month, and Research In Motion's BlackBerry Bold. To compete, Palm may need to sell its new phones for less than it had planned, UBS AG analyst Maynard Um wrote last week in a note to clients.

The BlackBerry's share of the U.S. market for advanced handsets grew to 44.5 percent in the first calendar quarter, from 35.1 percent in the previous three months, according to Framingham, Massachusetts-based research firm IDC. Palm lifted its share to 13.4 percent from 7.9 percent. Apple's share fell to 19.2 percent from 26.7 percent.

To improve its designs, Palm brought in Jon Rubinstein last year as executive chairman in charge of product development. Rubinstein, who had run Apple's iPod media player business, joined the company as part of a deal with buyout firm Elevation Partners. The firm bought a 25 percent stake in Palm.

To contact the reporters on this story: Ville Heiskanen in New York at vheiskanen@bloomberg.net; Whitney Kisling in Washington at wkisling@bloomberg.net

Last Updated: June 26, 2008 16:05 EDT