Palm Beats the Street, Then Takes a Beating

Updated from 4:31 p.m. EST.

Palm (PALM Quote) released earnings that beat estimates by a penny and trumpeted its dominance of the personal digital assistant market, even as analysts were discomfited by the numbers behind the company's happy talk.

Palm readers were especially distressed by revenue and gross margin projections for the next quarter.

Investors reacted by selling off Palm shares during tonight's after-hours session. Shares of the 3Com (COMS Quote) spinoff closed regular Wednesday trading at $38.06, down $5.31 or 12%. In after-hours trading, they slid precipitously $6.50, or 17%, to $31.56 on Island ECN. ...