Palm ( PALM) missed analysts' revenue estimate in its third-quarter results Thursday and saw its losses widen as demand slumped for the company's smartphones.

The firm's revenue saw its revenue fall to $90.6 million, down from $312 million in the same period last year, and well below analysts' estimate of $104.95 million.

Palm's performance, however was not completely out of the blue, and the firm recently warned that sales could come in below Wall Street's expectations. The Sunnyvale, Calif.-based company projected revenue between $85 million and $90 million.

The company explained that smartphones brought in just $77.5 million during the third quarter, down 72% from the same period last year.

Palm posted a third-quarter loss of 89 cents a share on a net loss of $98 million, compared to a loss of 53 cents a share and a net loss of $57 million in the year-ago quarter.

Excluding charges, Palm reported a loss of 86 cents a share on a net loss of $94.7 million, compared to a loss of 16 cents a share on a net loss of $17 million in the third quarter of 2008. Analysts had estimated a loss of 59 cents a share.

"We're proceeding through a challenging transitional period, however, our current results shouldn't overshadow the tremendous progress we've made against our strategic goals," said Ed Colligan, the Palm CEO, in a statement. "We're poised to user in a new era at Palm."

This "new era" will clearly revolve around Palm's hotly anticipated Pre phone.

Palm has been quickly fading in the smartphone market as Apple ( AAPL) iPhone and Research In Motion ( RIMM) crop of BlackBerrys surged in popularity, although expectations are high for the Pre.

The touchscreen phone, which also features Palm's WebOS operating system, will be launched with Sprint ( S) this summer.

RBC analysts recently upgraded Palm to 'Buy' ahead of the launch of the company's hotly anticipated Pre phone, giving the shares a significant boost.

In a separate announcement, Palm indicated that it intends to periodically offer new software features free of charge to customers of its WebOS products, including the Pre.

The cash-needy smartphone maker recently extended the stock sale which will help fund the Pre launch, and was firmly focused on the future during a conference call late Wednesday.

"We're working with Sprint to make sure that our marketing efforts are well aligned," said Colligan, explaining that Sprint has 35.5 million subscribers on its CDMA network.

Palm is also aiming for global domination with the Pre, according to the CEO.

"Anticipation for our launch is certainly not limited to the U.S.," he said, but did not name any prospective European partners. "Our goal is to work with partners that can make the Palm brand as recognizable in Europe as it is in the U.S."

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