RIM Shares Plunge as Profit, Outlook Fall Short
Research in Motion reported a higher first-quarter profit Wednesday, but its shares dropped sharply in after-hours trading as the results and outlook fell short of analyst expectations.
The maker of the BlackBerry handheld device reported fiscal first-quarter earnings that rose 116 percent to $482.5 million, or 84 cents a share, on a topline of $2.24 billion. Last year, the company earned 39 cents a share on sales of $1.082 billion.
A consensus estimate compiled by Thomson Reuters put RIM's profit at 85 cents a share and its revenue at $2.273 billion.
Shares of RIM were down roughly 8 percent in extended electronic trading after closing Wednesday up 1.32 percent at $142.34. RIM shares rose almost 34 percent during the quarter.
RIM added 2.3 million subscribers, about 100,000 more than it expected.
The results were a departure from the Waterloo, Ontario-based company's recent quarters, when it comfortably beat forecasts.
"The numbers in fact look perfectly fine in every respect except one,'' said Duncan Stewart, president of Duncan Stewart Asset Management in Toronto. "It appears as if they are forecasting earnings for the next quarter to be slightly lower than the consensus estimates. Every other metric is better.''
For the second quarter, RIM said it expects sales of between $2.55 billion and $2.65 billion and earnings of between 84 and 89 cents per share. It also said it expects to add about 2.6 million new subscribers.
"The disappointment is on the guidance side and hence the reason for the (stock) selloff,'' said Research Capital analyst Nick Agostino.
During the quarter ended May 31, RIM introduced a new handset and watched Apple tweak its iPhone software in a move that may raise competition for business customers in the smart phone market.
In May, RIM unveiled the Bold, which is its first major new BlackBerry model in more than a year. The device is set to be available from carriers this summer.
- Wire service copy contributed to this report.