You've Gotta Hand It to Palm

For Somaney's preview heading into the Palm conference call, please click here.

Palm (PALM - commentary - Trade Now) reported much better-than-expected numbers on Thursday night after the close of regular market trading. Given the sky-high expectations going into the call, it was indeed a surprise at how handily the company was able to exceed Street estimates.

The company reported a loss of 40 cents per share on revenue of $113 million. The Street was expecting a loss of 62 cents per share on revenue of $81 million. So, a nice beat on both counts.

The company said that sell-through in the quarter was 460,000 units vs. consensus expectations of 450,000 units sold. The company reported higher-than-expected margins, cash levels were up, and management stated that Palm was seeing strong demand from its enterprise customers for the Pre.

The company declined to provide any guidance going forward but did say that it would not be cash flow even until the second half of 2010. In addition, the company had no comment on how many Pre's had been sold thus far in June. One would have thought that the company would provide hungry longs with some detail on how the Pre is faring.

On the call, CEO Rubinstein displayed a cutting-edge sense of humor, which had me smiling from ear to ear. When a Citi analyst asked him whether "summer" was defined as before Labor Day, Rubinstein responded as follows: " Go on your Pre, type in summer and search on Wikipedia" for the definition of summer. LOL.

The company did little to provide any clarity on key issues, such as which carriers it's considering for expansion, why the supply of Pre was so limited and what other devices are in the pipeline.

All those unanswered questions matter not this morning, however, as the good guys are taking a further leap of faith and driving the shares of Palm even higher. As I write this, Palm is up about 9.5% thus far this morning.

Congratulations if you took a good guy shot at Palm going into yesterday's earnings release.

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Know what you own: Other mobile phone stocks include Apple (AAPL - commentary - Trade Now), Research In Motion (RIMM - commentary - Trade Now), Nokia (NOK - commentary - Trade Now), Motorola (MOT - commentary - Trade Now), LM Ericsson Telephone (ERIC - commentary - Trade Now) and Sprint Nextel (S - commentary - Trade Now).

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At the time of publication, Somaney was long RIMM stock and calls and long AAPL calls, although positions may change at any time without notice.

Jay Somaney is a partner and fund manager with TSG Capital Partners, a hedge fund based in Plano, Texas, and founder of GlobalTechStocks.com, a subscription site that focuses on technology and Indian stocks (including ADRs), providing information, news and chatter. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Somaney appreciates your feedback; click here to send him an email.