iPhone? What iPhone?
Research In Motion, maker of the BlackBerry line of smartphones, shrugged off significant challenges from Apple’s iPhone and a host of new phones running Google’s Android OS to exceed Wall Street projections for its third fiscal quarter and raised its guidance for Q4, sending its stock up in after-hours trading.
For the quarter ended November 30, 2009, RIM (NASDAQ: RIMM) reported a net income of US$628.4 million, or $1.10 per share, on sales of US$3.92 billion. That’s a 58 percent growth in net income and a 41 percent growth in revenue when compared to the same period last year.
A survey of analysts by FactSet Research had projected EPS of $1.04 on revenue of $3.78 billion. Shares of RIM were up more than 12 percent in after-hours trading.
Jim Balsillie, Co-CEO at Research In Motion, told a conference call of analysts “We’re pleased with the results of the third quarter, our record BlackBerry sales and number of subs per share. During the quarter, RIM’s manufacturing team did an outstanding job of ramping manufacturing, which allowed the company to ship ten million units in the quarter for the first time ever.”
The company said it shipped 10.1 million BlackBerry phones during the quarter, with net new subscribers coming in at 4.4 million. Analysts were expecting 4.1 million new subscribers with shipments of 9.5 million, on average. All told, RIM has sold 75 million BlackBerries.
For the quarter ending in February 2010, RIM said it expects earnings of between $1.23 and $1.31 per share, with revenue in the range of $4.2 billion to $4.4 billion. The company expects to ship between 10.6 and 11.2 million units.
Analysts were expecting earnings of $1.12 per share on revenue of $4.1 billion. RIM’s gross margins fell from 44.1 percent to 42.7 percent but are expected to rebound in the fourth quarter thanks to a stronger product mix.
RIM’s international push is on
RIM is continuing its international push. Balsillie said that 37 percent of RIM’s revenues, and 35 percent of subscribers are outside the United States. He announced deals with China Mobile and Digital China Holdings Ltd. to bring the BlackBerry to China as well as reported that RIM is evaluating the possibility of opening manufacturing and research and development facilities in the region.
“China represents a large new market opportunity,” Balsillie said. “We’re moving forward with our plans to more aggressively target this region.”
App World, RIM’s app store for its phones, is expanding to 18 more countries as the number of downloads increase and more BlackBerry phones come with App World pre-loaded.
Basillie thinks smartphones will eventually make up 100 percent of the market. “It’s just a matter of when we get there. There’s a lot of turbulence in the channel. You see this in the changes in strategies. There’s a very small number of material players and it’s causing changes in platform players. We’d like to be an agent of relevance for them,” he said.
