Palm saw its sales rise 36 per cent year on year during the third quarter of its 2006 fiscal year. Revenues for the three-month period reached $388.5m, down 12.6 per cent on the previous quarter's $444.6m, though a Q2-Q3 dip is traditional.

Net income for the quarter came to $29.9m (28 cents a share), according to GAAP rules - or $19.8m (19 cents a share) on an non-GAAP basis - up from $4.4m (four cents a share) in the year-ago quarter but down on the $260.9m ($5.02 a share) in GAAP income the company reported for Q2 FY2006.

Palm shipped 564,000 Treo smart phones in the three months to 3 March 2006, though its carrier and channel customers sold some 569,000 devices - up 102 per cent on the year-ago quarter - suggesting that it had quite a few of the handsets left over at the end of the previous quarter.

Palm shipped 756,000 devices in total, so the Treo line now accounts for almost 75 per cent of the company's shipments and revenues - the rest is made up of its E, T and Z PDAs and its LifeDrive "mobile manager" product.

This time last year, it shipped 938,000 devices in total, making for a fall on 19.4 per cent. The year-on-year increase in sales is a clear sign of the ship from low-margin PDAs to high-margin smartphones in the intervening 12 months.

The company told investors to expect Q4 FY2006 to yield revenues of between $400m and $405m, up 3-4.3 per cent sequentially and 40.2-42 per cent year on year. It said it anticipates earnings per share of 33-34 cents on a GAAP basis, 22-23 on a non-GAAP basis. ®