Palm shows Treo gains but mum on rumors of company sale

Palm Inc. posted a solid quarter, showing gains in its Treo smartphone sales, and its stock rose slightly on the news to $18.01 per share. However, the company declined to comment on rumors of a potential merger or sale that, according to some media reports, was supposed to be announced yesterday.
“As you can imagine, there are a lot of rumors and speculation out there and it is just our practice that we are just not going to comment on that stuff,” said Palm’s Andrew Brown in a conference call with analysts, according to a transcript of the call from Seeking Alpha.
Palm reported it sold a company record of 738,000 Treo smartphones, up 30 percent year over year and up 20 percent over the previous quarter. The company posted a net income in the quarter of $11.8 million, down from the $29.9 million it posted in the same quarter a year ago.
“Palm reported a solid FY3Q07 from virtually every metric,” wrote UBS analyst Maynard Um in a note to investors. However, Um downgraded UBS’ valuation on Palm, explaining that although Palm does stand as a merger or acquisition candidate, “we believe the risk/reward and valuations are difficult to justify at current levels.”
UBS makes a market in Palm securities.