Palm topped analysts' estimates in its fourth quarter Wednesday, pocketing $16.9 million, or 3 cents a share, on sales of $350.2 million.
Ahead of the earnings report, Palm (Nasdaq: PALM) closed off 1/2 to 26 3/8.
First Call Corp. consensus expected the maker of handheld computing devices to earn 1 cent a share in the quarter.
The $350.2 million in sales represents a 101 percent improvement from the year-ago quarter when it made $6.8 million, or 1 cent a share, on sales of $174.3 million.
Last quarter, Palm posted a profit of $15.5 million, or 3 cents a share, on sales of $277.3 million.
At the time, company officials said it wouldn't be able to maintain its exceptional growth rate, predicting fourth-quarter sales of between $280 million to $295 million.
"We are delighted to have delivered such excellent results in Palm's first full quarter as an independent public company," said CEO Carl Yankowski in a prepared release. "What's even more impressive is that we achieved these results despite industrywide component shortages. We believe Palm's aggressive marketing efforts and the visibility of our IPO have been major factors in stimulating the total market demand for handhelds."
Palm said it delivered more than 1.1 million devices in the quarter and had inventory turns of 32 and days sales outstanding of 31. The company also highlighted a host of moves designed to develop new revenue streams.
Palm also recently announced deals to develop mobile portals, instant messaging and add-on cards to boost functionality. Meanwhile, the company is licensing its operating system to other companies. The catch, however, is those licensees, including Sony (NYSE: SNE), Handspring (Nasdaq: HAND), Nokia (NYSE: NOK) and Qualcomm (Nasdaq: QCOM), are quickly becoming competitors.
On Tuesday, Palm's parent, 3Com (Nasdaq: COMS), reported a fourth-quarter loss of $146.8 million, or 42 cents a share, on sales of $763.7 million.
Palm shares stormed up to an all-time high of 165 after its March initial public offering before tumbling to a low of 19 7/8 in May.
Six of the seven analysts following the stock rate it either a "buy" or "strong buy."