Palm Beats, Mum on Buyout

Revenue for the third-quarter was $410.5 million, compared with $388.5 million the year before. Analysts were expecting $403.63 million.

Net income included stock-based compensation expense of $5.7 million, an in-process research-and-development charge from acquisitions during the quarter of $3.7 million and amortization of intangible assets of $300,000.

The stock closed down $1.71, or 8.8%, to $17.74 Thursday, a day after Motorola(MOT Quote) warned that it will miss first-quarter sales targets and post an unexpected loss. Motorola was rumored to be the likely buyer for Palm.

The Sunnyvale, Calif.,-based Palm said it continues to innovate and will offer at least four new "differentiated" smartphone models this year. Palm CEO Ed Colligan said the company, through founder Jeff Hawkins, is developing a new line of products.

"We clearly are working on one major new area that's been speculated in the press and Jeff Hawkins has talked about," said Colligan. "But we are not going to get into details about any of that right now."

Palm also did not act on its stock buyback program in the third quarter because the stock "clearly started to take off," said Brown. The company still has plans to buy back stock worth $219 million.

Palm smartphone business, which was 86% of total revenue in the third quarter, performed well. Smartphone sell-through for the third quarter were 738,000 units, up 30% year over year and revenue from smartphones reached $354 million in the third quarter, up 23% year over year.