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RIMM Blowing Past Even Rosiest Projections

It's the kind of surprise RIMM [Research in Motion LTD]investors were hoping for: The company once again blowing past even the rosiest projections and providing the kind of guidance that was really a nice Holiday gift.

But was it?

First, the news: RIMM posting $835 million in revenue. The high forecasts from the street were around $816 million. New subscriptions? The high-end was 810,000 new Blackberry users on the quarter. The company reports 875,000 instead!

And the forecast was equally rosy: a new revenue range topping out at $940 million for the fourth quarter, and 950,000 expected, new subscribers. Both figures way out ahead of projections.

But is this all the great news the Street, and investors, think it is?

Yes and no.

Yes, because business is clearly soaring. But no, because you have to start asking, "At what cost?"

No question the new Pearl is selling like gangbusters, but despite a monumental revenue number, and revenue guidance, RIMM still missed its EPS number by a penny. And guidance forward is a penny below the high-end, and the 92 cents to 99 cents range is well below the $1 consensus per share the Street was looking for.

What this all suggests is RIMM's operating margins are under surprising pressure. And that's what happens when you start to shift your sales focus from corporate clients (where margins have a little more flexibility) to consumers who are a lot more finicky when it comes to slapping down some plastic for a new cell phone.

It's an issue all the more serious when RIMM shares have jumped 105% this year, and almost 60% over the last quarter alone.

Never mind the suggestion of a margin squeeze: RIMM shares scampered another $7 a share after the numbers came out. Pearl is a bona fide blockbuster. And there's every indication that the next-generation Pearl, code-named Indigo, will be an even bigger success.

But keep a wary eye on the bottom line. RIMM is pushing "volume," but investors have to make sure it doesn't end up being just a lot of noise.

Questions? Comments? TechCheck@cnbc.com

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