RPT-UPDATE 2-Palm posts loss as sales of pricier phones slow

(Repeats to change headline to slow from slows) (Recasts throughout; adds details and comments from conference call, share activity, analyst estimates; changes dateline, previous SAN FRANCISCO; adds byline)

By Jennifer Martinez

LOS ANGELES, June 26 (Reuters) - Smartphone maker Palm Inc (PALM.O) on Thursday posted a fourth-quarter loss after a profit a year earlier, as slowing sales of older phones such as the Treo offset strong sales of its new, cheaper Centro phone.

Palm also posted lower-than-expected revenue during the quarter ended May 30, which helped send its shares down more than 3 percent in extended trading.

Palm's Chief Executive Officer Ed Colligan said on a conference call that he expects revenue to grow in the first quarter, but the company would likely not make a profit as it continues to spend on developing and marketing its various smartphones and wireless devices.

Colligan said Palm's Centro smartphone, priced at $99 and aimed at first-time users of these devices, was a "tremendous hit." The Centro, launched last September, also attracted many new customers to the company, he said.

But the Centro's popularity did not translate into higher revenue because it has lower margins than Palm's other phones, which are more expensive. Its flagship Treo phone competes with Apple Inc's (AAPL.O) iPhone and Research in Motion's (RIM.TO) (RIMM.O) BlackBerry, but has lost market share to them.

"We're very pleased with the Centro, even though we knew it was not a growth margin product," Chief Financial Officer Andy Brown said on the call. "We want to continue to support the Centro momentum."

NET LOSS, REVENUE SQUEEZED