BlackBerry maker RIM sees profit surge
BlackBerry shipments reach 14.2 million units in the third quarter, mostly outside the United States.
TORONTO — Research in Motion Ltd., the maker of the BlackBerry, on Thursday said its third-quarter earnings jumped 45 percent as sales keep surging overseas despite tough competition in the smart-phone market.
The results beat analyst expectations, and the company provided a forecast for the current quarter that also exceeded Wall Street expectations. Its shares rose in extended trading.
RIM said it shipped 14.2 million BlackBerrys in the quarter, narrowly beating Apple Inc.'s iPhone sales in its latest quarter, which ended in October. Most of RIM's growth is now coming from markets outside the U.S., Canada and Britain, where the BlackBerry is already the business phone of choice.
The Waterloo, Ontario-based company said its net income was $911 million, or $1.74 per share, in the fiscal third quarter, which ended Nov. 27. That was up from $628 million, or $1.10 per share, a year earlier.
Analysts surveyed by Thomson Reuters expected earnings of $1.65 per share, on average.
Revenue rose 40 percent to $5.49 billion, better than the $5.4 billion expected by analysts.
"International markets continue to adopt BlackBerry in record numbers," RIM Co-CEO Jim Balsillie said on a conference call with analysts.
Forty-eight percent of RIM's subscriber base at the end of the quarter was international. Balsillie acknowledged some disappointment in subscriber additions in North America this year.
"We've had, you know, OK net adds, but we're positioned to grow very, very strong and, you know, we've really knocked the cover off the ball in so many other markets around the world and yet our penetration in those are still very, very modest," he said.
Sales outside the U.S., U.K. and Canada represented about 44 percent of total revenue, while revenue in the U.S. represented about 34 percent of total revenue.
In August, RIM launched the BlackBerry Torch, with a touch screen and a slide-out keyboard for an overall look that's similar to competing devices. It also refreshed the look of the operating system.
RIM has said it will launch its first tablet computer, the PlayBook, early next year. On the call, Balsillie didn't give a more specific date. He said the initial versions will be Wi-Fi only.
For the quarter ending in February, the company projected earnings of $1.74 to $1.80 per share on revenue of $5.5 billion to $5.7 billion.
Analysts were looking for $1.61 per share and revenue of $5.46 billion.
The company's U.S.-traded shares climbed 94 cents, 1.6 percent, to $60.18 in after-hours trading after rising as much as 5 percent at one point.
BGC Financial analyst Colin Gillis said the results were "definitely solid" but said there's nothing that alleviates his concern that RIM will lose market share to Apple's iPhone and phones running Google Inc.'s Android software in 2011.
"Every one knew there was a strong quarter coming out of the company and they delivered," Gillis said.
"The concern over the future is still intact," he said. "There's definitely still demand for the phones in the international markets. Let's see what happens next quarter when they report and give guidance. It will be that May quarter where you'll see if they pulled through or you're going to see the cracks."
"There's still this negative sentiment in the U.S. on how you are going to respond if Verizon gets the iPhone," Taylor said. While the company is doing well internationally, there's concern that it will start to lose out to Apple and Android there as well, he said.