Shares of Research in Motion (Quote, Chart)and PalmOne (Quote, Chart)headed in opposite directions Thursday after the two handheld market leaders reported quarterly results.

RIMM shares fell on concerns about falling margins and slowing subscriber growth after the company reported results that were largely in line with Wall Street expectations.

Shares of PalmOne, meanwhile, were up 8% at one point after solidly trouncing analysts' expectations, as the company turned around Treo smartphone sales and gained on RIMM in the corporate market.

That said, any differences between the two on Thursday may have been as much about expectations and valuation as performance.

PalmOne trades at 24 times earnings and posted 26% sales growth in the quarter. RIMM, meanwhile, trades at 68 times earnings and grew sales 68% in the quarter. On a one-year forward basis, RIMM trades at 21 times estimates, while PalmOne trades at 17 times estimates.

In short, while RIMM may merit the higher valuation of the two, it also faces higher expectations, and in-line results just weren't enough for Wall Street's liking.