RIM Profit, Outlook Punch Through Economic Gloom

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 toppedexpectations, and delivered a strong outlook that suggested the companyis comfortably weathering the slowdown in the U.S. economy.

RIM’s shares, which roughly tripled in 2007 but have stagnated sincethe start of this year, rose 6 percent in after-hours trading asinvestors reacted to the results, which were also lauded by analysts.

The company said it earned $412.5 million, or 72 cents a share, inthe three months ended March 1. That was up from a profit of $187.4million, or 33 cents a share, in the same period a year earlier.

That beat a forecast made by the company in February, when it toldthe market to expect earnings of 66 to 70 cents a share, and sent RIMshares higher in after-hours Nasdaq trade.

For the upcoming first quarter, the company said it expects revenueof $2.23 billion to $2.3 billion and a profit of 82 cents to 86 cents ashare — better than the 77 cents expected by analysts, according toReuters Estimates.

Canaccord Adams analyst Peter Misek said the "monster" results areeven stronger because of RIM’s first-quarter forecasts in the face of afaltering 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 corporateAmerica would lead to slower sales of the BlackBerry, a staple deviceof most executives. As well, observers have warned that companies andbig government departments could delay upgrading to newer versions ofRIM’s smartphone lineup.

"To achieve these numbers in what looks like a U.S. recession is abig positive surprise for investors, many of whom had worried that aslowdown would hurt RIM," said Duncan Stewart, president of DuncanStewart Asset Management Inc. in Toronto.

RIM’s shares haven’t made much progress this year as investorsweighed the potential impact of the slowing U.S. economy and stiffercompetition 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 sharesrallied 6 percent from their regular session close of $115.79 on Nasdaqto hit $122.90 in after-hours trade.

The after-hours rise was relatively muted when compared to reactionsin 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 theconsumer market during the quarter was helped by telecom companypromotions that lured more users to multimedia-rich models of theBlackBerry, such as the Pearl.

He added: "It is important to note we did not see any evidence ofslowdown in our enterprise business outside of normal seasonal trends."

National Bank Financial analyst Deepak Chopra characterized theresults as "very strong" on all fronts and said RIM was benefiting fromwireless carriers increasingly looking to data revenue from serviceslike text messaging and wireless e-mail to supplement voice revenues.

"I think obviously we always have to be conscious of the economicdownturn," he said. "But I think the secular trend of data more or lessremains intact."

RIM said it added 2.18 million subscribers during the quarter, onthe high end of its earlier predictions, and that the total number ofBlackBerry 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.)