RIMM Jumps on Solid Beat and Raise

Research in Motion Ltd. (RIMM) reported F3Q08 results that topped Wall Street’s expectations and issued strong guidance Thursday after the closing bell, sending its shares higher by 12.1% in after-hours action. The large AH spike came on top of a 4.8% gain in composite trading Thursday in anticipation of earnings. Net income was $370.5 million, good for EPS of $0.65, versus net income of $175.2 million (EPS of $0.31) a year ago. Revenue rose 100% Y/Y to $1.67 billion on the addition of 1.65 million BlackBerry subscriber accounts and 3.9 million devices shipped. Analysts were expecting EPS of $0.62, on average, on revenue of $1.65 billion. Total BlackBerry subscriptions stood at approximately 12 million at the end of Q3 (period ended 12/1/07). Approximately 80% of RIMM’s revenue came from device sales. Despite concerns of a weak retail environment this holiday season, Co-CEO Jim Balsillie said his company was “pleased with the excellent consumer sales results achieved so far in the holiday buying season,” (Research In Motion F3Q08 (Qtr End 12/01/07) Earnings Call Transcript.

Standard & Poor’s analyst Todd Rosenbluth wrote Thursday morning before earnings that the company’s February quarter [Q4] guidance is really the key to how the market would react, “given its exposure to U.S. consumer spending and financial services firms’ telecom equipment spending, both of which could be restricted in early 2008.” RIMM projected Q4 revenue in the range of $1.80-$1.87 billion (midpoint = $1.835), on 1.82 million expected net subscriber account additions. EPS are expected to be in the range of $0.66-$0.70 (midpoint = $0.68). Consensus analyst estimates were for Q4 EPS of $0.65 on revenue of $1.74 billion.

Sources: Press release
Additional Reading: Research in Motion Up Ahead of Earnings • Look for Strong Q3 Earnings from Research In Motion

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