RIM shares roar on rosier subscriber outlook
TORONTO (Reuters) - Research In Motion shares surged more than 8 percent on Thursday after the company hiked its fourth-quarter subscriber growth forecast to reflect sturdy holiday sales.
The company, which also reaffirmed its revenue and earnings outlook, now sees quarterly net subscriber additions about 15 percent to 20 higher than the 1.82 million it forecast in December.
The total BlackBerry subscriber account base is estimated to reach about 14 million at the end of the quarter.
"Despite the higher sub guidance, RIM reiterated its revenue and EPS guidance," UBS analysts Jeffrey Fan and Maynard Um said in a note.
"We believe this reflects inventory burn as operators built slightly higher inventory ahead of the holiday selling season. We believe RIM guidance may likely prove conservative."
The company said fourth-quarter revenue is still seen in the range of $1.80 billion to $1.87 billion, with earnings per share between 66 cents to 70 cents.
Analysts were expecting a profit of 69 cents a share and revenue of $1.85 billion, on average, according to Reuters Estimates.
RIM, which is expanding its customer base from professionals to the consumer market, is scheduled to report its results on April 2.
"BlackBerry smart phones proved to be a big hit throughout the holiday selling season and we're pleased to see RIM's business momentum continuing in the new year," Jim Balsillie, co-chief executive said in a release.
"The seasonal slowdown in net subscriber account additions that we expected in the new year did not occur and our focused execution with partners has continued to produce strong results within both enterprise and consumer segments."
A big promotional push from operators, particularly in the United States, for Christmas and Valentine's Day likely buoyed the forecast, Fan and Um wrote.
Shares in the Waterloo, Ontario-based company gained 8.5 percent to $106.25 on Nasdaq and 8.8 percent to C$107.77 on the Toronto Stock Exchange on Thursday.
The rosier outlook follows a massive service outage in the Americas last week, which RIM blamed on a problem with a routine upgrade of an internal data routing system.
(Reporting by Susan Taylor; Editing by Scott Anderson)
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