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Tech Check
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No two ways about it: some analysts were anticipating a blockbuster Research in Motion [RIMM
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] earnings report, and RIM delivered, in spades.
The company comes in at 90 cents a share versus the 84 cent consensus on $3.46 billion, only slightly ahead of the $3.4 billion expected. It's a strong suggestion that RIM was able to translate slightly better topline growth into stellar, bottomline results at a time when Wall Street was concerned the company was essentially giving away product in order to boost subscription levels. The company's 40 percent in gross margins was right in line with expectations, considered a very strong positive in the current economic climate.
RIM reported that it sold 7.8 million Blackberrys during the quarter, way ahead of the 7.5 million expected; and new subscribers also surged to 3.9 million versus the 3.5 million expected.
Looking out to RIM's first fiscal quarter, this is the good-news report that keeps on giving: RIM now offering an EPS range of 88 cents to 97 cents, blowing past the 83 cents to 89 cent consensus expectation. That news comes on slightly lighter-than-expected revenue range of $3.3 billion to $3.5 billion. Analysts were anticipating a range of $3.4 billion to $3.6 billion. Still, RIM's subscriber expectations are blockbuster: now expecting between 3.7 million and 3.9 million new subscribers when analysts thought the figure would be closer to 3 million.
The company's projected gross margin in its fiscal first quarter is also a surprise at 43 or 44 percent. With RIM reporting 40 percent in its fourth fiscal quarter, this news would represent a turnaround in the GM slide RIM has been suffering lately.
The other big part of the RIM story is the hybrid Blackberry release coming this summer. Sources confirm to me that the new device will feature a touch screen and traditional keypad and compete directly with the Palm Pre expected from Sprint. The device, I'm told, will be a Verizon exclusive. Not so good for AT&T and Apple. Very good for RIM and Verizon.
Meantime, RIM shares, under so much pressure until about a month ago, are skyrocketing on the news. RIM stock had already scampered 32 percent before today's trading. They finished higher by 6 percent during the day, and are jumping another 17 percent on the earnings news. You gotta figure there's a healthy amount of short covering going on right now, and the longs are celebrating big-time tonight. But when you look at this guidance, and you see where the marketplace is headed, along with RIM's product pipeline, you start to appreciate that this could be a real RIM rally with legs.
We'll see how these shares trade on Friday.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes