BlackBerry maker Research In Motion broke through the 10 million subscriber mark at the end of the second quarter and said it's expecting the growth in accounts to accelerate as the company targets the consumer market. The company's shares spiraled higher.
RIM shares leaped more than 12 percent on heavy volume Friday. The stock was also boosted by a series of boosted earnings forecasts from brokerages that follow the company.
The Waterloo, Ontario-based smart phone maker said Thursday that its profit and revenue more than doubled in the period, and results should be better than expected for the rest of the year.
RIM earned $287.7 million, or 50 cents per share, in the quarter ended Sept. 1, up from $140.2 million, or 25 cents per share, in the same period a year earlier. Revenue more than doubled to $1.37 billion from $658.5 million.
Analysts surveyed by Thomson Financial were expecting, on average, a profit of 50 cents per share on revenue of $1.36 billion.
"This outperformance was driven by the strong product cycle we're in the midst of, as well as the diversification of our user base across multiple geographies and multiple market segments," Jim Balsillie, co-chief executive, said on a conference call with analysts.
Balsillie said markets outside North America represent about 32 percent of RIM's subscriber base, and consumers represent more than 30 percent of subscribers.
RIM has been targeting consumers after enjoying success in the corporate market for years. The BlackBerry's push e-mail software allows customers to access their e-mail on their wireless devices in real time.
Waterloo, Ontario-based RIM added about 1.45 million BlackBerry subscriber accounts in the quarter and shipped more than 3 million devices. The total BlackBerry subscriber account base at the end of the second quarter was 10.5 million.
In its outlook, RIM said it expected revenue for the upcoming third quarter of $1.60 million to $1.67 billion and earnings per share of 59 to 63 cents.
Subscriber account additions in the third quarter were expected to be approximately 1.65 million.
"It's better than I thought it would be and I think it's better than what the street thought," said Deepak Chopra, an analyst with the National Bank Financial. "I think people are seeing these results relatively well right now given the stock has had a massive run in such a short period."
The shares declined slightly after U.S. markets closed Thursday. Chopra attributed the stock's dip to profit-taking.
"Some people might have had even higher expectations," Chopra said. "The stock is up almost 100 percent since the beginning of May. I just think there's profit taking as people sell on news."
Peter Misek, an analyst with Canaccord Adams, called it a great quarter and great guidance.
"They've started to extend to the consumer market. They've now gone international," Misek said. "They have absolutely executed remarkably well and that's why the stock has performed so well."
Misek said he expects the stock to go higher once new BlackBerry models are released. He said he doesn't see another company taking market share away.
Goldman Sachs analyst Brant Thompson said strong sales over the summer show RIM is penetrating the consumer market and he expects new BlackBerry models to spur growth.
"They talked a lot about new product initiatives targeting the consumer," Thompson said after the analyst call. "They hinted at having relationships with Google and major music companies for content around some of their new services."
Balsillie said RIM will introduce software to allow up to five people to share pictures, music and documents through their BlackBerrys. BlackBerry Unite will be offered as a free download.
-- AP contributed to this report.