Shares of PalmOne dropped after the company predicted a disappointing outlook, despite news that its quarterly results exceeded expectations.

Following news that its fiscal first-quarter earnings had beat analyst expectations the stock rose 15 per cent.

However, the stock then fell 11 per cent to $33.20 after the maker of Palm and Treo digital assistants forecast second-quarter profit of 50 cents per share, far short of the 58 cents per share expected by analysts.