Research in Motion Shares Soar, Palm Down After Profit Reports
Shares of BlackBerry maker Research In Motion jumped 20% on Friday, a day after the company reported better-than-expected quarterly earnings and strong subscriber growth for its popular wireless e-mail devices.
But the news wasn't as rosy for rival Palm, which saw its shares drop after its earnings report showed profits fell 43% in its fiscal fouth quarter.
RIM shares rose to as high as $200.58, while Palm shares fell more than 3%.
After the market closed on Thursday, RIM reported earnings of $223.2 million, or $1.17 a share, for the three months ended June 2, up from $128.8 million, or 67 cents a share, a year earlier.
Analysts at UBS, Bear Stearns, Banc of America, Credit Suisse and Morgan Keegan all upgraded RIM shares.
Though some analysts have raised concerns that competition from Apple's iPhone could hurt sales of RIM smartphones, RIM forecast higher-than-expected guidance for the current quarter.
"We believe RIM has been the main beneficiary of the iPhone buzz," said Merrill Lynch's Vivek Arya in a note Friday. Arya raised his price target for RIM shares to $240 from $190 and maintained his buy rating.
Other analysts also bumped up their price targets.
According to Arya, the iPhone launch has raised awareness of smartphones, and since the new phone is only available at AT&T, other manufacturers could gain customers.
The spill over effect hasn't been a help to Palm . The company's profit fell 43% and revenue was down 1% in its latest reporting period. Palm reported record sales of its Treo smart phones, but it is feeling the competition in the sector.