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If you were looking for instant gratification from Palm’s (PALM) turnaround you’re going to be sorely disappointed.

Palm reported fiscal second quarter results that were better than a year ago, but short of Wall Street estimates. On an adjusted basis, which accounts for subscription accounting and stock compensation, Palm reported a net loss of $59.6 million, or 37 cents a share, on revenue of $302 million. Wall Street wanted a loss of 32 cents a share on revenue of $266 million. In a nutshell, revenue was better than expected, but that didn’t translate to the bottom line.

The company reported a net loss of $85.4 million, or 54 cents a share (statement).

Meanwhile, Palm shipped 783,000 smartphones in the quarter, down 5 percent from its fiscal first quarter, but up 41 percent from a year ago. Smartphone sell-through was 573,000 units, down 29 percent from the first quarter. Palm said it had more inventory than it would like but noted that the quarter ended on Black Friday so the holiday rush isn’t in its current financials.

That slowdown in growth raises a few eyebrows. Can Palm launch a device and then sustain momentum? In a statement, Palm CEO Jon Rubinstein said the company was executing on its long-term strategy with the Pixi. He added that “we’re still in the early stages of a long race, and we’re energized by the opportunity to compete in this exciting market.”

On a conference call, Palm execs were questioned about visibility into upcoming quarters. Palm’s focus is on expanding distribution and boosting its customer base, the company said. The company’s plan is to have a small family of strong products and then expand with more carriers in more regions.

Source: Palm Q2 Disappoints: Says It's 'In the Early Stages of a Long Race'