BlackBerry maker Research in Motion Ltd (RIM) on Thursday reported a better-than-expected 33 percent jump in first-quarter profit as the company continues to boost market share among non-corporate customers.
RIM’s second-quarter outlook, however, sent shares tumbling almost 7 percent in aftermarket activity, but the stock regained most of its losses during the company’s conference call as executives assuaged analysts’ concerns.
The Waterloo, Ontario-based company earned US$643 million, or US$1.12 per share, in the quarter that ended May 30. That’s up from US$482.5 million, or US$0.84, in the year-ago period.
PHOTO: BLOOMBERG
Excluding a US$175.1 million tax benefit and other one-time items, RIM earned US$564.4 million, or US$0.98 per share, in the latest period — easily beating the average US$0.94 estimate of analysts polled by Thomson Reuters.
INCREASED REVENUE
Revenue rose 53 percent to US$3.42 billion. RIM added 3.8 million net subscribers during the quarter — a bit less than the 3.9 million subscribers who joined up during the fiscal fourth-quarter holiday season — bringing total accounts to 28.5 million.
Co-CEO Jim Balsillie said RIM’s market share of the US smartphone market has grown to 55 percent from 40 percent in the past two quarters. Balsillie said the BlackBerry Curve is the No. 1 selling smartphone in North America. RIM’s competition includes Apple’s new iPhone and US$99 version, the new Palm Pre and the Google Android.
Eighty percent of new BlackBerry subscribers are non-corporate consumers, he said. The Canadian company has been targeting the consumer market after enjoying success in the corporate market for years.
In the second quarter, RIM forecast earnings of US$0.94 to US$$1.03 per share on revenue of US$$3.45 billion to US$3.7 billion. Analysts expected profit of US$0.97 per share and US$3.61 billion in revenue.
RIM also said it expected to sell between 8.1 million and 8.7 million new units, compared with the range of 8.5 million to 8.9 million that some analysts expected.
That outlook drove the company’s shares down more than 6 percent in aftermarket trading immediately after the earnings report was released, but recovered to close down only 0.7 percent at US$76.55. RIM’s stock has more than doubled since bottoming at US$35.05 in March.
HIGH EXPECTATIONS
Genuity Capital Markets analyst Deepak Chopra said the stock declined initially on higher expectations.
“They continue to do phenomenally well. There was obviously increased expectations. There was chatter that the numbers could even be bigger,” Chopra said.
Balsillie said the summer season could mean slower sales, but believed the release of new devices and the public’s growing adoption of smartphones would cause a surge in sales.
“The lineup for the next 14, 15 months is spectacular,” Balsillie said. “We’ve got sector winds at our sails.”
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