Sector Snap: Handset stocks mostly decline

Palm shares fell 65 cents, or 9.9 percent, to $5.89.

Late Thursday, the Treo and Centro maker said it swung to a fourth-quarter loss, and revenue fell compared with the same quarter last year.

Palm said sales of its low-price, low-margin Centro smart phone are strong but are being offset by slowing sales of higher-margin Treo devices.

Thomas Weisel analyst Matthew Sheerin said in a note to investors that Palm is "still a wait-and-see story."

He thinks Palm will not be profitable for at least two quarters and said that "competition in the high-end smartphone space will only get more difficult, with the likes of the new BlackBerry Bold and new models from HTC, Apple and others."

The analyst rates the stock "Market Weight" with a $6 price target.

Shares of rival Research In Motion Ltd. fell $4.47, or 3.6 percent, to $118.99.

RIM said late Wednesday that its fiscal first-quarter profit more than doubled but fell a penny per share short of what analysts expected.

In a note to investors, First Analysis Securities Corp. analyst Scott Pope said that in its earnings conference call RIM supported his belief that newcomers to the smart phone market "will not pose any serious threat to the company's near-term growth."