The reported fourth-quarter numbers for BlackBerry owner RIM were strong.
TORONTO (Reuters) - BlackBerry maker Research In Motion (RIM.TO: Quote, Profile, Research)(RIMM.O: Quote, Profile, Research)
reported a higher fourth-quarter profit on Wednesday that topped
expectations, and delivered a strong outlook that suggested the company
is comfortably weathering the slowdown in the U.S. economy.
RIM's shares, which roughly tripled in 2007 but have stagnated since
the start of this year, rose 6 percent in after-hours trading as
investors reacted to the results, which were also lauded by analysts.
The company said it earned $412.5 million, or 72 cents a share, in
the three months ended March 1. That was up from a profit of $187.4
million, or 33 cents a share, in the same period a year earlier.
That beat a forecast made by the company in February, when it told
the market to expect earnings of 66 to 70 cents a share, and sent RIM
shares higher in after-hours Nasdaq trade.
For the upcoming first quarter, the company said it expects revenue
of $2.23 billion to $2.3 billion and a profit of 82 cents to 86 cents a
share -- better than the 77 cents expected by analysts, according to
Reuters Estimates.
Canaccord Adams analyst Peter Misek said the "monster" results are
even stronger because of RIM's first-quarter forecasts in the face of a
faltering U.S. economy.
"What's impressive is that, given the macro environment that they know about, they guided this strong," he said.
Some analysts have raised concerns that job losses in corporate
America would lead to slower sales of the BlackBerry, a staple device
of most executives. As well, observers have warned that companies and
big government departments could delay upgrading to newer versions of
RIM's smartphone lineup.
"To achieve these numbers in what looks like a U.S. recession is a
big positive surprise for investors, many of whom had worried that a
slowdown would hurt RIM," said Duncan Stewart, president of Duncan
Stewart Asset Management Inc. in Toronto.
RIM's shares haven't made much progress this year as investors
weighed the potential impact of the slowing U.S. economy and stiffer
competition from the likes of Apple Inc (AAPL.O: Quote, Profile, Research), Motorola (MOT.N: Quote, Profile, Research) and Nokia (NOK.N: Quote, Profile, Research).
However, in the wake of Wednesday's earnings report, the shares
rallied 6 percent from their regular session close of $115.79 on Nasdaq
to hit $122.90 in after-hours trade.
The after-hours rise was relatively muted when compared to reactions
in prior quarters, when the stock has jumped more than 10 percent,
implying investors remain cautious despite the strong results.
The stock closed at C$117.63 in Toronto, down C$2.47 or 2 percent.
RIM co-Chief Executive Jim Balsillie said strong growth in the
consumer market during the quarter was helped by telecom company
promotions that lured more users to multimedia-rich models of the
BlackBerry, such as the Pearl.
He added: "It is important to note we did not see any evidence of
slowdown in our enterprise business outside of normal seasonal trends."
National Bank Financial analyst Deepak Chopra characterized the
results as "very strong" on all fronts and said RIM was benefiting from
wireless carriers increasingly looking to data revenue from services
like text messaging and wireless e-mail to supplement voice revenues.
"I think obviously we always have to be conscious of the economic
downturn," he said. "But I think the secular trend of data more or less
remains intact."
RIM said it added 2.18 million subscribers during the quarter, on
the high end of its earlier predictions, and that the total number of
BlackBerry subscribers has surpassed 14 million.
The Waterloo, Ontario-based company said revenue more than doubled to $1.88 billion from $930.4 million a year earlier.
(Additional reporting by Ritsuko Ando; editing by Peter Galloway.)
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