June 29, 2004 3:44 PM PDT

RIM reports profit, soaring sales

BlackBerry device and service company Research In Motion reported on Tuesday its fourth straight quarter of profitability as sales doubled for the period.

RIM shares shot up after the company's earnings announcement. Shares were up $5.43 per share, or 9.1 percent, to $64.81 in after-hours trading, after closing down $1.61 per share, or 2.6 percent, to $59.38.

RIM reported revenue of $269.6 million for its first quarter, ended May 29, a rise of 158 percent compared with the same period a year ago, when it posted revenue of $104.5 million. The Waterloo, Ontario-based company's earnings came in at $55 million, or 28 cents per share, compared with a net loss of $8.2 million, or 5 cents per share, last year.

Excluding charges for its patent-infringement case with holding company NTP, RIM's earnings were $70.6 million, or 36 cents per share.

Analysts surveyed by Thomson First Call were expecting earnings of 32 cents per share on revenue of $263.6 million for the quarter.

Handheld sales accounted for 68 percent of RIM's revenue for the quarter, while service accounted for 19 percent, software 9 percent and 4 percent from other businesses.

The company holds more than $847.5 million in cash and cash equivalents as of May 29, 2004.

Subscribers to RIM's wireless service grew by 270,000 in the quarter for a total of about 1.34 million, thanks in large part to its carrier partners.

"Our carrier partners are experiencing significant success in the marketplace and are further expanding sales and marketing efforts to capitalize on the growing interest in BlackBerry," RIM co-CEO Jim Balsillie said in a statement.

RIM raised its revenue forecast for its second quarter from a range of $270 million to $290 million to between $290 million and $310 million. For the third quarter, RIM expects revenue to be between $340 million and $360 million.

The company increased its GAAP (generally accepted accounting principles) earnings estimates for the second quarter from between 24 cents and 29 cents per share to between 32 cents to 37 cents per share.

While sales are expected to slow in the summer months, they will pick back up again starting in November, Balsillie said in a conference call. The CEO added that the heat is on for RIM to grow its business in Europe and in a quarter or two he will expect Asia to also be a contributor to sales.

By then, RIM will have the next version of its enterprise software, version 4.0, available. The company plans to release the software in September. The product will aim to improve installation, wireless security and remote manageability. The new version also will simplify software development for the BlackBerry platform, the company said.

 

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