NEW YORK (CNN/Money) - Palm Inc. on Tuesday logged a fiscal fourth-quarter operating loss that narrowed from the same quarter last year and was in line with Wall Street's general expectations.

The leading maker of handheld computers said it lost $16.2 million, or 3 cents per share, during the quarter ended May 31.

That excludes a write-down for excess inventory as well as other one-time charges and compares with a loss of $153.6 million, or 16 cents per share, during the same quarter a year ago.

Palm originally had thought it would break even during the quarter, but warned of a shortfall on May 30, citing weaker-than-expected demand for its products. Following that warning, the consensus estimate of analysts polled by First Call was for the company to log an operating loss of 3 cents per share.

Including one-time charges, Palm's net loss for the quarter was $27 million, or 5 cents per share, compared with a net loss of $392 million, or 69 cents per share, during the year-ago quarter.

At $233 million, Palm's fourth-quarter revenue rose 41 percent from the $165 million in revenue reported in the fourth quarter of fiscal 2001 and was better than most analysts had expected, according to the First Call survey.

"Palm executed quite well in a down market," Eric Benhamou, Palm's chairman and acting CEO, said in a statement.

"Over the quarter, our pro forma gross margins grew to nearly 35 percent, we generated positive cash flow from operations, and channel inventory remained within our desired range," Benhamou added. "And we have positioned the company to address broader market opportunities with innovative new products this fall and when the industry moves to a new growth phase."

Some industry observers had speculated that Palm would announce a new CEO as a permanent replacement for Carl Yankowski, who abruptly resigned in early November. Benhamou has assumed the role of CEO on a temporary basis.

After falling 8 cents to close at $1.59 on Nasdaq ahead of the earnings release, shares of Palm (PALM: Research, Estimates) gained back 6 cents, trading at $1.65 in extended-hours trade Tuesday evening.

During the latest quarter, Palm introduced two new devices with improved displays. Its next major product upgrade is expected later this year when it begins selling hardware based on more powerful microprocessors and introduces its newest operating system software, called Palm OS 5.

The company, which is facing an increasingly competitive threat from "Pocket PC" devices built on Microsoft's handheld computer operating system, also recently split its operating system business off from its hardware business, forming a wholly-owned subsidiary called PalmSource.

During the fourth quarter, Palm said it shipped roughly 900,000 Palm-brand handhelds, and more than 4.4 million units during the 2002 fiscal year. That brings the total number of Palm-branded handhelds shipped since it first began selling them in 1996 to 18 million.