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December 17, 2010, 12:16 AM EST
By Hugo Miller
Dec. 17 (Bloomberg) -- Research In Motion Ltd., maker of the BlackBerry smartphone, climbed in late trading yesterday after forecasting sales and profit that topped analysts’ forecasts, helped by demand for its Curve and Torch models.
Revenue this quarter will be $5.5 billion to $5.7 billion and earnings per share will be $1.74 to $1.80, Waterloo, Ontario-based RIM said. Analysts projected revenue of $5.46 billion and profit of $1.61 a share.
“The fact that guidance is decently above consensus, to me that’s pretty positive,” said Tavis McCourt, an analyst at Morgan Keegan & Co. in Nashville, Tennessee, who rates the stock “outperform.” “Things are trending in the right direction.”
RIM rose as much as 5.5 percent to $62.50 in late trading, after closing 6 cents higher at $59.24 on the Nasdaq Stock Market. The stock has jumped 38 percent since August, narrowing its loss for the year to 12 percent.
RIM is counting on a new version of the BlackBerry Bold and the Torch, which has a slide-out keyboard and better Internet browser, to lure customers away from Apple Inc.’s iPhone. RIM is also tapping demand in markets such as Brazil and Indonesia for less expensive models like the Curve, which incorporate its free instant messaging system, to fend off the challenge from a slew of new phones based on Google Inc.’s Android software.
Sales last quarter rose 40 percent to $5.49 billion, RIM said in a statement yesterday. Analysts had predicted $5.41 billion, the average of estimates compiled by Bloomberg. Earnings per share were $1.74 compared with an average estimate, excluding some costs, of $1.65. RIM added 5.1 million new subscribers, while analysts estimated 5.2 million.
Losing Share
“The miss on new subscriber estimates is a thin reed to cling to for the bears,” said Tero Kuittinen, an analyst with MKM Partners LP in Stamford, Connecticut who has a “buy” rating on the stock. “The magnitude of the earnings beat suggests that the Torch has really done well.”
AT&T began selling the Torch, which features the improved BlackBerry 6 operating system, in August and halved the phone’s price to $99.99 to stimulate sales ahead of holiday shopping.
Net income for the third quarter climbed to $911.1 million from $628.4 million, or $1.10 a share, a year earlier. The company said it expects BlackBerry shipments this quarter of 14.5 million to 15 million units, beating the average estimate from analysts of 14.2 million units.
Still, RIM continues to lose market share globally to the iPhone and Android handsets. RIM’s share of the global smartphone market slid to 15 percent in the third quarter from 20 percent a year earlier, according to researcher IDC. Apple’s was unchanged at 17 percent while Samsung Electronics Co., which uses Android, jumped to 8.9 percent from 3 percent.
PlayBook Surge
The stock’s recent surge has been driven by expectations for the BlackBerry PlayBook tablet, which RIM will sell in the U.S. to go head to head with Apple’s market-leading iPad.
RIM may sell 2.55 million tablets, generating about $1.1 billion in revenue in its first full year of sales, according to a Bloomberg survey of 17 analysts. By contrast, Apple sold 4.19 million iPads last quarter, for revenue of $2.8 billion.
Co-Chief Executive Officer Jim Balsillie reiterated the PlayBook will be introduced in the first quarter of 2011, amid a flurry of new, competing devices from Samsung and Motorola Inc., and an expected second version of the iPad.
Some corporate customers are delaying plans to buy rival tablet devices while they wait for the PlayBook to come out, Balsillie told analysts on a call yesterday.
“I think the PlayBook redefines what a tablet should do,” he said. There is “overwhelming interest and overwhelming pressure to get units.”
Co-Chairmen
The gross margin, or percentage of sales left after costs, widened to 43.6 percent last quarter, compared with an average analyst estimate of 42 percent. RIM said its margin should be similar this quarter and is targeting a percentage in the “low 40s” in its next fiscal year.
RIM named Balsillie and co-Chief Executive Officer Mike Lazaridis as co-chairmen. Balsillie stepped down as chairman of the company in March, 2007, after a review of its stock-option grants and a restatement of its results.
--With assistance from Julie Hyman and Amy Thomson in New York. Editors: Peter Elstrom, Margot Slade
To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
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Dec. 17 (Bloomberg) -- Research In Motion Ltd., maker of the BlackBerry smartphone, climbed in late trading yesterday after forecasting sales and profit that topped analysts’ forecasts, helped by demand for its Curve and Torch models.
Revenue this quarter will be $5.5 billion to $5.7 billion and earnings per share will be $1.74 to $1.80, Waterloo, Ontario-based RIM said. Analysts projected revenue of $5.46 billion and profit of $1.61 a share.
“The fact that guidance is decently above consensus, to me that’s pretty positive,” said Tavis McCourt, an analyst at Morgan Keegan & Co. in Nashville, Tennessee, who rates the stock “outperform.” “Things are trending in the right direction.”
RIM rose as much as 5.5 percent to $62.50 in late trading, after closing 6 cents higher at $59.24 on the Nasdaq Stock Market. The stock has jumped 38 percent since August, narrowing its loss for the year to 12 percent.
RIM is counting on a new version of the BlackBerry Bold and the Torch, which has a slide-out keyboard and better Internet browser, to lure customers away from Apple Inc.’s iPhone. RIM is also tapping demand in markets such as Brazil and Indonesia for less expensive models like the Curve, which incorporate its free instant messaging system, to fend off the challenge from a slew of new phones based on Google Inc.’s Android software.
Sales last quarter rose 40 percent to $5.49 billion, RIM said in a statement yesterday. Analysts had predicted $5.41 billion, the average of estimates compiled by Bloomberg. Earnings per share were $1.74 compared with an average estimate, excluding some costs, of $1.65. RIM added 5.1 million new subscribers, while analysts estimated 5.2 million.
Losing Share
“The miss on new subscriber estimates is a thin reed to cling to for the bears,” said Tero Kuittinen, an analyst with MKM Partners LP in Stamford, Connecticut who has a “buy” rating on the stock. “The magnitude of the earnings beat suggests that the Torch has really done well.”
AT&T began selling the Torch, which features the improved BlackBerry 6 operating system, in August and halved the phone’s price to $99.99 to stimulate sales ahead of holiday shopping.
Net income for the third quarter climbed to $911.1 million from $628.4 million, or $1.10 a share, a year earlier. The company said it expects BlackBerry shipments this quarter of 14.5 million to 15 million units, beating the average estimate from analysts of 14.2 million units.
Still, RIM continues to lose market share globally to the iPhone and Android handsets. RIM’s share of the global smartphone market slid to 15 percent in the third quarter from 20 percent a year earlier, according to researcher IDC. Apple’s was unchanged at 17 percent while Samsung Electronics Co., which uses Android, jumped to 8.9 percent from 3 percent.
PlayBook Surge
The stock’s recent surge has been driven by expectations for the BlackBerry PlayBook tablet, which RIM will sell in the U.S. to go head to head with Apple’s market-leading iPad.
RIM may sell 2.55 million tablets, generating about $1.1 billion in revenue in its first full year of sales, according to a Bloomberg survey of 17 analysts. By contrast, Apple sold 4.19 million iPads last quarter, for revenue of $2.8 billion.
Co-Chief Executive Officer Jim Balsillie reiterated the PlayBook will be introduced in the first quarter of 2011, amid a flurry of new, competing devices from Samsung and Motorola Inc., and an expected second version of the iPad.
Some corporate customers are delaying plans to buy rival tablet devices while they wait for the PlayBook to come out, Balsillie told analysts on a call yesterday.
“I think the PlayBook redefines what a tablet should do,” he said. There is “overwhelming interest and overwhelming pressure to get units.”
Co-Chairmen
The gross margin, or percentage of sales left after costs, widened to 43.6 percent last quarter, compared with an average analyst estimate of 42 percent. RIM said its margin should be similar this quarter and is targeting a percentage in the “low 40s” in its next fiscal year.
RIM named Balsillie and co-Chief Executive Officer Mike Lazaridis as co-chairmen. Balsillie stepped down as chairman of the company in March, 2007, after a review of its stock-option grants and a restatement of its results.
--With assistance from Julie Hyman and Amy Thomson in New York. Editors: Peter Elstrom, Margot Slade
To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
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