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April 02, 2009

RIM Surprises Analysts with Impressive Q4 Profits

Research in Motion (News - Alert) (RIM) surprised analysts today after reporting impressive fiscal fourth-quarter earnings that signal continued growth despite a worldwide economic downturn.
 
The Ontario-based company said its profit jumped to $518.3 million, or $.90 per share, compared with net income of $396.3 million, or $.69 per share, in the prior quarter and net income of $412.5 million, or $.72 per share, in the same quarter last year. 
 
In an earnings call Jim Balsillie, Co-CEO at RIM, said the company experienced a record quarter with subscriber growth leading the way and signaling momentum of the company’s new BlackBerry (News - Alert) products.
 
“RIM experienced an extraordinary year in fiscal 2009, shipping our 50 millionth BlackBerry smartphone and generating $11 billion in revenue,” said Balsillie.
 
The results were all the more surprising considering that in February RIM warned analysts and investors that the company would come in on the lower range of its earnings estimate of $.83 cents to $.91 cents for the period.
 
However, the company managed to come in on the top end of those estimates.
 
"Looking ahead into fiscal 2010, we see exceptional opportunities for RIM and its partners to leverage the investments and success of the past year to continue growing market share and profitability," said Balsillie.
 
In the first-quarter revenue is expected to be in the range of $3.3 to $3.5 billion, and gross margin is expected to be approximately 43 percent to 44 percent, according to the company.

In addition, the company expects to add between 3.7 million and 3.9 million new subscribers in the first quarter.
 
While RIM is often considered insulated from a softening cell-phone industry because global sales of "smart" phones like the BlackBerry are expected to rise, the company is facing an uphill battle from the entrenched smartphone leader Apple iPhone.

As Tom Keating, CTO, vice president and founder TMC (News - Alert) Labs, reported this week RIM launched its new BlackBerry App World platform, an on-device store for RIM smartphones. The site includes such features a catalog of applications available for a BlackBerry models, access over a Wi-Fi or cellular network and support for free and for-purchase apps.
 
RIM is banking on its App World to help compete with the Apple (News - Alert) App Store which has become an industry standard.
 
RIM says it added 3.9 million new BlackBerry subscriber accounts during the fourth-quarter, bringing the total to 25 million.

Tim Gray is a Web Editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Tim’s articles, please visit his columnist page.

Edited by Tim Gray
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