In its first quarterly update since announcing is merger with Handspring (Quote, Company Info), Palm Inc. (Quote, Company Info), which will soon split its two operating units (Palm Solutions Group and PalmSource) into two separate companies, said on Tuesday that it is still in the red but momentum is returning to its business lines.

The Milpitas, Calif.-based company announced net losses of $15 million, or 51 cents a share, for the fiscal fourth quarter after several one-time charges for lease obligations, severance and the pending PalmSource spin-off. Revenue declined 3.2 percent to $225.8 million, which represents an 8-percent increase from the fiscal third quarter that ended in February. Palm's fiscal year ended May 31.

The results cap off a year that is nothing short of revolutionary for the handheld computer pioneer. In addition to the stunning Handspring merger, Palm rebranded its own product lines into two sub-brands to target two distinct customer segments: Zire for individuals and Tungsten for mobile professionals. Over the past year, the company introduced five handhelds into those sub-classes.