RIM stock hammered despite strong profit and revenue growth
Share price down nearly 21 per cent in after-hours trading
Last Updated: Friday, September 26, 2008 | 11:28 AM ET
The Canadian Press
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Research In Motion (RIM) co-CEO Jim Balsillie is seen at the launch of BlackBerry Bold in Mumbai, India, on Sept. 18, 2008. (Rajanish Kakade/Associated Press)BlackBerry maker Research in Motion Ltd. reported a 72 per cent increase in second-quarter profit and an 88 per cent jump in revenue Thursday, but its shares were pounded in U.S. after-hours trading as the results fell narrowly short of expectations.
RIM shares were down $20.08 US, or 20.6 per cent, at $77.45 after hours on the Nasdaq.
The Waterloo, Ont.-based company, which reports its results in U.S. dollars, said its profit amounted to $495.5 million, or 86 cents a diluted share, for the three months ended Aug. 31. That compared with a profit of $287.7 million, or 50 cents per diluted share, a year ago.
Quarterly revenue was $2.58 billion, up from $1.37 billion a year ago.
Average analyst expectations put profit at 87 cents a diluted share and revenue at $2.5 billion, according to five estimates tallied by Thomson Financial.
The company said it added 2.6 million net new BlackBerry subscribers in the quarter to bring the total subscriber base to about 19 million.
RIM is heading into the holiday shopping season with an arsenal of new products aimed at competing against other high-profile mobile devices like the iPhone.
While the BlackBerry Bold is already available in Canada, it is scheduled for launch in the United States in October, while the BlackBerry Pearl Flip, modelled after traditional flip phones, has also been announced.
"We shipped over 11 million BlackBerry smartphones in the first half, and we're gearing up for an even stronger second half," co-CEO Jim Balsillie said in a release.
"Our enterprise business remains strong, and our momentum in the consumer marketplace continues as we head into the holiday buying season with an amazing product portfolio and solid marketing support from partners."
In its outlook for the third quarter, the company said revenue is expected to come in between $2.95 billion and $3.1 billion while earnings per share is forecast between 89 cents and 97 cents. New subscriptions are projected at 2.9 million.
RIM shares ended the regular trading day up 61 cents to $101 Cdn in Toronto and up 82 cents US to $97.52 in New York before the results were announced.
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