Sales of Treos Lift Palm’s Earnings

Palm Inc. reported Thursday that its earnings beat analysts’ forecasts as it sold more Treo mobile phones and introduced a device based on Microsoft Corp.’s Windows operating system.

The company also gave a forecast for the current quarter that topped Wall Street estimates, and its shares rose almost 6% in after-hours trading.

Palm, which is based in Sunnyvale, Calif., said it boosted its share of the so-called smart phone market in the U.S. to 30% from 22% a year earlier.

Analysts have said Palm benefited from patent litigation that threatened to shut down the e-mail service of popular BlackBerry devices made by Canadian competitor Research in Motion Ltd. Research in Motion this month settled the four-year patent dispute with NTP Inc.

Palm’s net income climbed to $29.9 million, or 28 cents a share, for its fiscal third quarter ended March 3 from $4.4 million, or 4 cents, in the year-earlier quarter.

Revenue rose 36% to $388.5 million from $285.3 million a year earlier.

Profit excluding certain items was 19 cents a share. Analysts on average had expected earnings of 17 cents a share on revenue of $377 million.

For its fiscal fourth quarter ending June 2, Palm forecast revenue of $400 million to $405 million and adjusted earnings per share of 22 cents to 23 cents. Analysts on average have forecast revenue of $395.7 million and earnings per share before items of 21 cents.

Palm said that it shipped 564,000 Treos in the third quarter and that phones sold through cellphone carriers and other distributors doubled to 569,000.

The company also began selling phones that use the Microsoft Windows Mobile operating system.

Palm’s Treo 700 is the first of four new smart phones models the company plans to introduce this year.

Shares of Palm rose to $21.25 in after-hours trading after gaining 47 cents to $20.14 during the regular session.