Updated from 5:16 p.m. EDT

Palm ( PALM) warned on Wednesday that its fiscal first-quarter sales will likely be about 7% lower than it previously forecast.

The Treo smartphone maker did reaffirm its earnings expectations. But the move marked the second time the company has cautioned Wall Street analysts to lower their estimates for the just-completed quarter.

The company blamed the sales shortfall on lower-than-expected shipments of its Treo smartphones to retailers. Despite the disappointing sales, end-user sales of its Treos did rise over those in the fourth quarter, the company said.

"We will soon address the market dynamics responsible for our first-quarter revenue shortfall with two major product launches, one that improves our pricing position and both which extend our carrier relationships to global markets," CEO Ed Colligan said in a press release.

Following a halt in trading prior to the announcement, Palm's stock was off $1.23, or 7.9%, to $14.30.

Palm now expects to post earnings of 13 cents to 14 cents a share -- 18 cents to 19 cents a share before stock options and other charges -- on sales ranging from $354 million to $356 million for the period that ended Sept. 1. The company's previous guidance called for revenue of between $380 million to $385 million. Palm plans to report its final results on Sept. 21.

On average, analysts polled by Thomson First Call had estimated that the company would earn 19 cents a share excluding costs on $382.9 million in sales in the period.

However, analysts had much higher expectations for the quarter back in June before the company's original guidance for the period disabused them of their notions. At the time of the company's last earnings report , they were calling for a pro forma profit of 22 cents a share on $413.4 million in sales.

Shares of Palm closed regular trading up 58 cents, or 3.9%, to $15.53.