Palm on Thursday reported its third-quarter financial results, indicating smartphone shipments of just 482,000 units, down 42 percent year-over-year. Smartphone revenue was also hit hard, down 72 percent and contributing to the company's net loss of $98 million. "We're proceeding through a challenging transitional period, however our current results shouldn't overshadow the tremendous progress we've made against our strategic goals," said Ed Colligan, CEO and president. "We're poised to usher in a new era at Palm."

Palm last week announced plans to remarket stock in an attempt to stay afloat. The company increased the number of shares from 18.5 million to 23.1 million, potentially adding a total of $103.6 million in revenue to counter ongoing consumption of $95 million to $100 million per quarter.

The smartphone maker is relying on its upcoming Pre smartphone and webOS to bring the company back to profitability. The webOS platform will provide free software updates, allowing the associated revenues to be recognized on a subscription basis over the 24-month estimated product life.

RBC analyst Mike Abramsky recently upgraded his rating on Palm stock, explaining that the Pre makes the company a takeover target. He anticipates that the hardware and software combination will drive the company to outperform market expectations, potentially attracting a buyout that could be worth between $15 and $16 a share.