Palm Inc has reported a loss of $356.5 million for the current financial year – the equivalent of $0.63 per share.

The loss came despite Palm's $1.56 billion revenue for the year being 47 per cent up over fiscal 2000.

Fourth-quarter results were also "challenging", as Palm executives put it. Revenue was just $165.3 million, compared to $350.2 million for the fourth quarter a year ago. The net loss was $392.1 million, or $0.69 per share, compared to net income of $12.4 million, or $0.02 per share for the quarter last year.

Palm has been hit by reduced demand for its flagship products, as it brought out the new m500 models. The company has decided to cut 500 jobs – about 25 per cent of its workforce.

Palm CEO Carl Yankowski promised that the company will "report a smaller loss in the first quarter, and return to profitability in the second quarter".