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Research in Motion's Profit Soars 68 Percent

Friday, 17 Sep 2010 09:45 AM

Research in Motion Ltd. said its second-quarter earnings jumped 68 percent as it added new BlackBerry subscribers and beat analysts expectations at a time many have started to write the company off.

RIM shares increased 8 percent in extended trading.

BlackBerry shipments climbed 45 percent to 12.1 million from a year ago. That comes amid concerns that RIM is losing ground to Apple Inc.'s iPhone and devices using Google Inc.'s Android software.

The company said it made a profit of $797 million, or $1.46 per share, in the three months ended Aug. 28. That's up from $476 million, or 83 cents per share, a year earlier.

Analysts surveyed by Thomson Reuters expected earnings of $1.35 per share, on average.

Revenue rose 31 percent to $4.62 billion, better than the $4.47 billion expected by analysts.

For the quarter ending in November, the company projected earnings of $1.62 to $1.70 per share on revenue of $5.3 billion to $5.55 billion.

Analysts were looking for $1.39 per share and revenue of $4.83 billion.

Shares of RIM, which is based in Waterloo, Ontario, rose $3.72, or 8 percent, to $50.21 after the results came out. In regular trading earlier, shares rose 97 cents, or 2.1 percent, to close at $46.49.

Before the results came out, RIM's stock price has fallen more than 30 percent this year on the perception it is losing market share to Apple's iPhone and Google Inc.'s Android.

There are far fewer third-party applications available for BlackBerrys, and because of a weak app store strategy, users have had trouble finding them. RIM has also been behind on adapting its software for touch screens.

Worries that countries such as India and the United Arab Emirates would ban BlackBerry services also drove the stock lower. The countries complained that BlackBerry e-mail encryption posed a national-security risk. Investors' fears of a shutdown have dissipated on expectations that RIM would reach deals to avert bans. India postponed a ban for at least two months after RIM agreed to give security officials "lawful access" to data.

BlackBerrys still have a strong following in the corporate market, but investors have seen signs of its grip fraying.

RIM launched the BlackBerry Torch in August, with a touch screen and a slide-out keyboard. It has an improved operating system and a new Web browser, but analysts say RIM is trying to play catch-up rather than breaking new ground

But BGC Financial analyst Colin Gillis said there's no doubt RIM beat expectations in the second quarter.

"There's no way around it. We got revenue on the high end of guidance," Gillis said. "Things are not falling apart."

Duncan Stewart, director of research and analysis at DSam Consulting, said everyone who has been describing RIM as "the living dead, the next company that's going to implode" won't be able to say their pessimism has been reflected in the earnings or in the guidance for next quarter.

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Research in Motion Ltd. said its second-quarter earnings jumped 68 percent as it added new BlackBerry subscribers and beat analysts expectations at a time many have started to write the company off.RIM shares increased 8 percent in extended trading.BlackBerry shipments...
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Friday, 17 Sep 2010 09:45 AM
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