NEW YORK (CNN/Money) - Palm Inc. logged a wider net loss for its fiscal first-quarter Monday as demand for its handheld computers led to a 19.6 percent decline in sales from the same period last year.

Executives of Palm, the leading handheld computer supplier, gave a generally upbeat assessment of the industry's prospects for the coming months but, at the same time, provided a revenue forecast that was below Wall Street's most recent expectations.

"The handheld industry has started to move into a more favorable period after a year of significant difficulties and overall shrinkage," Eric Benhamou, Palm's chairman and CEO, said on a conference call Monday evening.

Benhamou said he is optimistic about new products set to hit the marketplace during the holiday selling season, both from Palm and from licensees of its handheld operating system software.

He said the new products will provide substantial improvements in performance and functionality without a corresponding increase in cost, "thereby bringing further stimulus to the market."

At the same time, Judy Bruner, Palm's chief financial officer, said the company expects revenue in the fiscal second-quarter ending in November to come in between $245 million and $265 million.

The most recent consensus estimate of analysts polled by First Call was for Palm's second-quarter revenue to be nearer $270.5 million.

Bruner said Palm is aiming to break even in the second quarter, excluding one-time charges. By First Call's count, analysts most recently had forecast a loss of 2 cents per share for the quarter.

Shares of Palm (PALM: Research, Estimates) were unchanged in extended-hours trade after picking up 3 cents to close at 76 cents on Nasdaq.

After the close of trading, Palm said it lost $258.7 million, or 45 cents per share, compared with net loss of $32.4 million, or 6 cents per share, during the same period last year.

Excluding excess inventory, restructuring and other one-time charges, Palm said its pro forma loss was $36.4 million, or 6 cents a share. That was a penny less than what most analysts had expected the company to lose, according to First Call's survey.

Palm's revenue for the first quarter came in below expectations, falling to $172.3 million from $214.3 million a year ago.

Executives of Palm entered the quarter forecasting revenue between $175 million and $185 million. By First Call's count, analysts generally had expected the company's top line to be nearer $177.7 million, suggesting a 17 percent decline from last year.

In recent sessions, momentum has been building behind Palm's stock, which rose as high as $165 on March 2, 2000 but fell below $1 earlier this year after the company's board of directors approved a reverse stock split.

Palm shares got a boost Friday after Todd Bradley, president and CEO of Palm's hardware unit, said that the worst of the downturn may be over and the company is now seeing signs of a recovery in demand.

On top of a general decline in demand for its products, Palm has faced an increasing threat from rivals such as Hewlett-Packard (HPQ: Research, Estimates), Toshiba and NEC, all of which sell competing devices powered by Microsoft's (MSFT: Research, Estimates) newest handheld computer operating system software.

Other vendors that sell devices using Palm's OS, such as Handspring (HAND: Research, Estimates) and Sony, also have taken a bite out of Palm's hardware sales. While it competes with these companies for hardware sales, it also licenses the Palm OS to them for use on their products.

The company also is aggressively marketing its operating system software to manufacturers of mobile phone and other wireless communications devices.

Earlier this year, Palm split off its operating systems unit from its hardware unit in an effort to better capitalize on the profit potential there and ultimately spin off the software group, now called PalmSource, in an initial public offering.

Speculation that the company was near securing a round of private financing for the PalmSource unit, which would mean an IPO could happen in as soon as seven months, also boosted Palm's shares on Friday.

Earlier Monday, Palm unveiled a new branding strategy aimed at distinguishing its consumer products and services from those it is targeting at businesses. The company unveiled two new sub brands for its handheld products, which it now will begin marketing under the "Tungsten" and "Zire" brand names.

The Tungsten product line will include handheld hardware and software solutions that incorporate wireless and mobile technologies for IT managers seeking to deliver secure data to mobile work forces, Palm said.

The Palm Zire product line will be designed to be simple, approachable and easy-to-use for people balancing personal, professional or academic lives, the company said.

The first handhelds under the Tungsten and Zire names are expected to be available this fall.