31/12/10

Research In Motion 3Q Profit Jumps 45% On Higher Revenue

11.1 million, or $1.74 a share, up from $628.4 million, or $1.10 a share, a year earlier. Revenue jumped 40% to $5.49 billion.

The company in September had forecast third-quarter, share earnings between $1.62 and $1.70 and revenue ranging from between $5.3 billion and $5.55 billion--both were estimates well above analysts' forecasts at the time.

Gross margin rose to 43.6% from 42.7%.

The company also forecast fourth-quarter earnings of $1.74 to $1.80 a share on revenue of $5.5 billion to $5.7 billion. Analysts surveyed by Thomson Reuters expect $1.61 on $5.46 billion.

RIM shares zig-zagged after hours, jumping initially before falling into the red only to shift back into positive territory. The stock was recently up 4.3% to $61.80 in after-hours Nasdaq trading.

As of Thursday's close, the stock had fallen 12% this year, but was up nearly 40% since hitting a 52-week low of $42.53 on August 31.

The recent share-price increase reflects significant hype over its upcoming tablet, the PlayBook, though that device isn't set to come to market until early next year. It wasn't immediately clear if RIM's fourth-quarter guidance includes any revenue from the Playbook.

RIM has also taken numerous steps to fend off a fierce competitive challenge from the iPhone and a slew of Android-enabled devices. For instance, the company recently revamped support for third-party application developers, overhauled its BlackBerry operating system, making it more user friendly and introduced the BlackBerry Torch, the first BlackBerry model to include a touch screen and slide-out keyboard.

RIM also unveiled the Playbook, which will include Adobe Inc.'s (ADBE) Flash, and run on a highly-touted operating system made by QNX Software Systems. RIM acquired QNX earlier this year and followed that up with the purchase of The Astonishing Tribe, or TAT, this month. TAT is a Swedish sofware company best known for designing user interfaces for mobile devices.

Still, BlackBerry's image has suffered in the past 18 months, as RIM was late to recognize the importance of third-party applications, touch-screen interfaces and the need for a snazzy operating system. This has translated into declining market share in the key North American market, though RIM continues to post strong growth internationally.

According to Gartner, RIM's share of the North American smartphone market slipped to 27.3% at the end of the calendar third quarter from 51% a year earlier. Devices running on the Android operating system surged to 39.1% from 5% during the same period, while the iPhone dipped slightly to 27.7% from 29.5%.

stuart.weinberg@dowjones.com

(Nathan Becker in New York contributed to this article.)

Copyright © 2010 Dow Jones Newswires


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