* RIM results, forecast top expectations
* Stock jumps 21 percent in after-hours trade
* Q4 EPS 90 cents vs 72 cents a year earlier
* Says now has 25 million subscribers
(Adds details, CEO comment, updates stock. In U.S. dollars)
By Wojtek Dabrowski
TORONTO, April 2 Research In Motion RIM.TO
RIMM.O posted surprisingly strong quarterly earnings on
Thursday and offered a rosy outlook that signaled further
growth despite the global economic slowdown as consumers
embrace its newest BlackBerry smartphones.
The results, which also revealed RIM now has a total of
about 25 million BlackBerry subscribers, sent the company's
shares about 21 percent higher in after-hours trade.
RIM's profit rose to $518.3 million, or 90 cents a share,
in its fourth quarter ended Feb. 28, from $412.5 million, or 72
cents, a year earlier.
The results topped the expectations of analysts, which had
been dampened by a profit warning that RIM delivered in
"They are crushing it," Canaccord Adams analyst Peter Misek
said. "Not only are they holding up, but it's clear they're
gaining market share."
Revenue was $3.46 billion, up 84 percent from $1.88 billion
in the year-before quarter, putting it on the high end of RIM's
December forecast for revenue of between C$3.3 billion and $3.5
"This is wildly better than people were looking for," DSAM
Consulting analyst Duncan Stewart said of the company's overall
results. "Getting improvement in both margin and growth at the
same is a rare thing in the field of technology."
For the current quarter ending May 30, RIM expects revenue
of between $3.3 billion and $3.5 billion and earnings per share
of 88 cents to 97 cents. Gross margin is expected to come in
between 43 and 44 percent, the company said, up from 40 percent
It expects to add between 3.7 million and 3.9 million
subscribers. It added 3.9 million this quarter.
Analysts had previously expressed concern about RIM's
ability to maintain momentum during the recession.
But such worries -- as well as the February profit warning
-- seemed like ancient history on Thursday as RIM's shares
jumped to $59.52 in late trading from their regular-session
close of $49.09 on the Nasdaq.
Still, the company is keeping a close eye on operating
expenses to make sure it can continue to thrive even if the
downturn continues, RIM co-CEO Jim Balsillie said during a
conference call with analysts.
"RIM is faring well in the current environment and we
continue to believe we can grow market share," he said.
"However, we believe it is prudent to turn our attention to
making sure that the operations are as streamlined as possible
in case of further deterioration in the broader economy."
CONSUMER DEMAND RETURNS
Retail consumers in general have curbed spending, which may
mean they are not willing to pay more for flashy new
smartphones. But the plunge in spending may be coming to an
end, Misek said.
"There was a big rebound in consumer demand in
mid-February," he said, adding BlackBerry handsets are selling
well with wireless carriers such as Verizon (VZ.N) and Vodafone
Balsillie said BlackBerry demand in the retail market was
stronger than the company had expected following the holiday
season, in part thanks to aggressive promotions from carriers.
Meanwhile, large corporations that use the BlackBerry as
the mobile communications tool of choice have also cut their
budgets. Even so, Balsillie said, demand from corporate
customers is also staying strong.
RIM's main customers have traditionally been business
executives, lawyers, politicians and other professionals who
use its BlackBerry handsets to send wireless email securely.
To diversify its user base, RIM has pushed aggressively
into the broader consumer market with multimedia-laden handsets
like the Pearl model and the touchscreen BlackBerry Storm --
its answer to Apple's (AAPL.O) popular iPhone.
This week, it also launched an online store to sell
entertainment, games, news and travel software to BlackBerry
While the iPhone has been a hit with consumers, it has yet
to gain enough traction with business users to threaten RIM's
dominant position in the corporate client market.
(Reporting by Wojtek Dabrowski; Editing by Frank McGurty)