Palm, the California-based handheld computer producer, delivered its second blow to investors yesterday in a matter of days as it warned that third quarter results would fall short of previous projections.

The company, which disclosed last week that it had cut almost a fifth of its workforce in recent months, said trading in the US had been hit by lower than expected demand for its top of the range products.

"Economic uncertainty weighed more heavily than we anticipated on the consumer and enterprise segments of the handheld industry," said Palm chief Eric Banhamou.

Third quarter revenues are now expected to be between $205m (£130m) and $210m compared with the $230m to $250m predicted in December, when the company was forecasting a modest operating loss for the period. Results for the quarter will be hit also by a $140m charge to cover restructuring and a writedown in the value of the company's real estate holdings in California's Silicon Valley. Palm shares, which fell 11% to $11.60 last week on news of the job cuts, slipped another 9% to $10.50 in early trading.

Palm said demand for its mid-range and lower priced products has been in line with its expectations, with European demand proving strong. But US demand for premium products such as the Tungsten T has failed to live up to expectations, reflecting continued depressed IT spending by US corporations and weak re tail consumer demand. The Tungsten T, launched in the US in October with a $499 price tag, is now selling for $399. The $100 price cut at the end of January helped stimulate demand, but not enough to offset general market weakness.

Restructuring, including the recent 19% headcount reduction, will result in a charge of up to $45m when third quarter figures are published this month. The firm also expects a $100m non-cash charge to reduce the carrying value of 39 acres of land it owns in San Jose.