Palm saw revenues improve 3 per cent year-on-year in its first quarter 2004, it revealed yesterday.

Palm chairman and interim CEO Eric Benhamou said: "Palm Solutions Group and PalmSource demonstrated continued strong execution. Each business posted year-over-year revenue growth. We improved our gross margin, strengthened our balance sheet with an increase in our cash balance and managed our inventory to 20 turns."

Benhamou waxed positive for the company's future: "As we look to the near and medium term, we notice many indications of a new growth wave in the making for the mobile device industry."

The company reported revenues of $177.4 million for a net loss of $21.7 million. This loss included $2.7 million in restructuring charges and $1.9 million in separation costs associated with the forthcoming spin-off of the company's operating system arm, PalmSource.

The company lost $258.7 million in its first 2003 quarter. Gross margins also climbed, from 2003's 30.7 per cent to 34.7 per cent in Q1 2004.

Palm said it shipped about 645,000 Palm handhelds in the quarter. About 1.2 million Palm-powered handhelds were shipped in total, according to PalmSource , which sells licenses for the Palm OS. The total number of Palm-powered devices shipped so far stands at 30.1 million.

Palm is in the process of acquiring Handspring, its hardware company will be renamed PalmOne after the acquisition is complete, and the OS licensing arm will be spun off as an independent company.