Shares of Palm Inc. (Nasdaq: PALM) made slight gains Friday as the firm posted better than expected profits the day before.
The firm posted reported a third quarter profit of $11.8 million, or 11 cents per diluted share, compared to earnings of $29.9 million, or 28 cents per diluted share for the same period last year.
In a conference call, the firm also addressed rumors that it was to be acquired after it hired banker Morgan Stanley earlier this month to explore options.
As far as what you need to understand is that we are running the business, Palm CEO Ed Colligan said on the call. That's what this management team is 100% focused on, is running an independent supplier of mobile computing products into the marketplace. End of story.
Shares of Palm traded 1.63 percent higher, to $18.04 on Friday afternoon. Despite the better than expected results, the company is still losing ground to its main rival, Research in Motion, maker of the venerable Blackberry device.
While Palmâ€™s Treo shipments grew 37 percent YoY in the Feb Q, the growth pales in comparison to the 90 percent YoY growth of RIMâ€™s Blackberry, by our estimates, said analyst Vivek Arya of Merrill Lynch in a note to clients. Palm lost share despite 11 percent declines in average Treo selling prices versus only 3% drop in Blackberry selling prices, in the same period.
Merrill Lynch maintains a Neutral rating on Palm and lowered 2008 estimates by 20 cents to 61 centers per share.