Palm on Thursday afternoon reported mixed results for its summer quarter, which ended in August. The company posted a net loss of $41.9 million versus a just $0.8 million loss from the same period a year ago. The company attributed somewhat more than half the loss, or $24.4 million, to increasing stock prices and related compensation as well as securities, but left most other concerns to performance-related problems.

The news comes despite unusually strong smartphone sales for Palm. The company sold nearly 1.03 million devices over the three-month span of the quarter, representing a 49 percent spike year-over-year. It also notes that the revenue from these sales climbed by 10 percent to $333.8 million.

Palm chief Ed Colligan explains the loss by arguing that the company is still in the middle of a "transformation" that won't near completion until the launch of its long-delayed, Linux-based Palm OS sequel due in early 2009.

The company has again been partly buoyed by the entry-level Centro, which landed at more carriers in the summer and saw a price drop to $70 at the same time as the iPhone 3G launch that helped rally back-to-school sales. Palm also launched two key new Treo smartphones during the period that included both the 800w for Sprint and its first true worldwide HSDPA phone, the Treo Pro.