palmOne Battered On Outlook

Shares of palmOne plunged 22% Friday after the company warned that its results for the current quarter will fall below Wall Street estimates because of delays by wireless carriers in rolling out the new Treo 650 smartphone.

palmOne said it now expects earnings of 21 cents a share on revenues of $280 million for the February quarter, well below estimates of 34 cents a share and $318 million in sales. The company maintained its outlook for its fiscal year ending in early June, but analysts said that quarter could be at risk too.

Rising inventories and falling margins also weighed on the stock, which was downgraded by Bear Stearns and Merrill Lynch.

The broader market didn’t fare much better, as investors were unnerved after Pfizer became the latest drug company to get battered by safety concerns.

The Nasdaq fell 10 to 2135, the S&P 500 lost 9 to 1194, and the Dow dropped 55 to 10,649. Volume soared to 2.48 billion shares on the NYSE, and 2.41 billion on the Nasdaq. Decliners led by a handful of issues on both the NYSE and the Nasdaq. Downside volume was 64% on the NYSE, and 60% on the Nasdaq. New highs-new lows were 190-23 on the NYSE, and 125-9 on the Nasdaq.

Adobe lost 1% despite better than expected results and guidance.

3Com fell 5% after missing estimates, and California Micro , Cirrus and Citadel Security plunged on weaker than expected outlooks.

McLeod soared 89% on a deal with MCI .

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