Shares of Palm, Inc. dropped nearly 30 percent on news that the company lowered revenue expectations by $60 million.

The Santa Clara-based company said late Thursday that sales for its fourth quarter ending Friday will be approximately $230 million, compared with the previously expected $290 million to $300 million.

Analysts were expecting a much higher revenue number but when news that the numbers were lower, the stock slumped.

The outlook for Palm remains gloomy due to stiff competition and tough marketplace conditions.

Palm remains the world's leading provider of PDAs and of the operating system for handhelds, but it has struggled during the past few quarters to return to profitability. The economic slump of 2001 is considered to be a major factor in Palm's poor financial position.