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BlackBerry calms analysts' fears as sales keep rising
By Rob Gillies |
June 20, 2009, Saturday
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Print Edition
Print Edition
BLACKBERRY maker Research in Motion Ltd reported a better-than-expected 33 percent jump in first-quarter profit on Thursday as the company continued 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 a share, in the quarter that ended May 30. That's up from US$482.5 million, or 84 cents, in the year-ago period.
Excluding a US$175.1 million tax benefit and other one-time items, RIM earned US$564.4 million, or 98 cents a share, in the latest period.
Revenue rose 53 percent to US$3.42 billion. RIM added 3.8 million net subscribers during the quarter -- a little 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 United States smart phone market had grown to 55 percent from 40 percent in the past two quarters. Balsillie said the BlackBerry Curve was the No. 1 selling smart phone in North America. RIM's competition includes Apple's iPhone and its new US$99 version, the new Palm Pre and Google's Android.
Eighty percent of new BlackBerry subscribers are non-corporate consumers, he said.
In the second quarter, RIM forecast earnings of 94 cents to US$1.03 a share on revenue of US$3.45 billion to US$3.7 billion. Analysts expected profit of 97 cents a share and US$3.61 billion in revenue.
RIM also said it expects to sell between 8.1 million and 8.7 million new units, compared to the 8.9 million 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 the stock came back to trade down just 21 cents from its US$76.55 close.
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 can mean slower sales, but believes the release of new devices and the public's growing adoption of smart phones will 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."
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 a share, in the quarter that ended May 30. That's up from US$482.5 million, or 84 cents, in the year-ago period.
Excluding a US$175.1 million tax benefit and other one-time items, RIM earned US$564.4 million, or 98 cents a share, in the latest period.
Revenue rose 53 percent to US$3.42 billion. RIM added 3.8 million net subscribers during the quarter -- a little 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 United States smart phone market had grown to 55 percent from 40 percent in the past two quarters. Balsillie said the BlackBerry Curve was the No. 1 selling smart phone in North America. RIM's competition includes Apple's iPhone and its new US$99 version, the new Palm Pre and Google's Android.
Eighty percent of new BlackBerry subscribers are non-corporate consumers, he said.
In the second quarter, RIM forecast earnings of 94 cents to US$1.03 a share on revenue of US$3.45 billion to US$3.7 billion. Analysts expected profit of 97 cents a share and US$3.61 billion in revenue.
RIM also said it expects to sell between 8.1 million and 8.7 million new units, compared to the 8.9 million 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 the stock came back to trade down just 21 cents from its US$76.55 close.
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 can mean slower sales, but believes the release of new devices and the public's growing adoption of smart phones will 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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