SiliconBeat

Palm is expecting sales for its just-ended fiscal 2009 third quarter to be no more than $90 million, far below the $158 million average analyst forecast, and below the $100 million that was the lowest forecast among the 20 analysts surveyed by Thomson Reuters.

The news, released after markets closed, sent Palm’s shares down 10 percent to around $6.62, according to Yahoo Finance.

The company blamed “reduced demand for Palm’s maturing legacy smartphone products, the challenging economic environment and later-than-expected shipments of the Treo Pro in the United States.”

The company also expects to see declining sales for its fourth quarter, when the company expects to use up about one-third of its roughly $300 million in cash to help pay for operations.

Palm stated that cash used in operations for the quarter is expected to be between $95 million and $100 million. The company’s cash, cash equivalents and short-term investments balance is expected to be between $215 million and $220 million at the end of the third quarter.”

Although Palm believes it has sufficient cash, cash equivalents and short-term investments to meet its working capital needs under its current operating plan,” Palm said that it plans “to strengthen its working capital position given the challenging economic environment” and the imminent launch of the new Palm Pre, the company’s answer to Apple’s iPhone.

One idea: “remarketing” some of the preferred stock and warrants currently owned by Elevation Partners, with Palm “entitled to retain any net profits realized from such remarketing.”