Research In Motion (NASDAQ: RIMM) reported a higher first-quarter profit on Wednesday as it continued to sign up subscribers for its BlackBerry smartphones at a rapid clip. Still, its shares dropped 8 percent in late trading, as the results and outlook fell short of analyst expectations.
RIM said it earned $482.5 million, or 84 cents a share, in the three months ended May 31. That was up from a profit of $223.2 million, or 39 cents a share, a year earlier.
The company said that revenue surged to $2.24 billion — up 107 percent from a year earlier — and that it added 2.3 million subscribers, or about 100,000 more than it expected.
But while the per-share profit came within the outlook the company gave in April, it missed analyst expectations by 1 cent, according to Reuters Knowledge.
RIM’s shares, which had risen roughly 20 percent since early April, dropped sharply in after-hours electronic trading, shedding $11.24, or 7.9 percent, to $131.10 from their regular-session close of $142.34 on NASDAQ.
The results were a departure from the Waterloo, Ontario-based company’s recent quarters, when it comfortably beat analyst forecasts.
“The numbers in fact look perfectly fine in every respect except one,” said Duncan Stewart, president of Duncan Stewart Asset Management in Toronto. “It appears as if they are forecasting earnings for the next quarter to be slightly lower than the consensus estimates. Every other metric is better.”
For the second quarter, RIM said it expects sales of between $2.55 billion and $2.65 billion and earnings of between 84 and 89 cents a share. It also said it expects to add about 2.6 million new subscribers.
“The disappointment is on the guidance side and hence the reason for the [stock] selloff,” said Research Capital analyst Nick Agostino.
The company is betting that new product launches, such as its recently announced BlackBerry Bold will help it grow for the balance of the year and beyond, despite a slowdown in the U.S. economy.
RIM’s mainstay base of business users has been expanding, but the company is also pushing strongly into the broader retail market in a bid to diversify.
It has kept large corporate and government clients interested with high-end handsets like the Bold, while at the same time offering a large lineup of multimedia features for consumers with its Pearl and Curve smartphones.
On the Toronto Stock Exchange, RIM shares closed up C$2.22, at C$144.00.