RIM reports Q3 profit of US$628.4M

MONTREAL, Que. — Research in Motion Ltd. (TSX:RIM) reported a sharp increase in quarterly profits on Thursday, saying its efforts to get global consumers to buy its BlackBerry smartphones are paying off.

The BlackBerry Storm2 for Verizon is shown in San Francisco. BlackBerry maker Research in Motion Ltd. released report third-quarter results Thurdsay.

MONTREAL, Que. — Research in Motion Ltd. (TSX:RIM) reported a sharp increase in quarterly profits on Thursday, saying its efforts to get global consumers to buy its BlackBerry smartphones are paying off.

The results show the “success of our efforts to expand into broader customer segments,” co-CEO Jim Balsillie said in a statement.

The BlackBerry maker, which keeps its books in U.S. dollars, said it earned US$628.4 million or $1.10 per diluted share for the quarter ended Nov. 30.

That compared with a profit of $396.3 million or 69 cents per diluted share a year ago.

Revenue in what was the company’s third quarter totalled $392 billion, up from $2.78 billion in the same quarter last year.

The Waterloo, Ont., company handily beat analyst estimates for the third quarter, ended Nov. 28.

According to Thomson Reuters the average analyst estimate had been for earnings of $1.04 per share and $3.78 billion in revenue.

Shares in RIM, which closed down 59 cents at C$67.80 on the Toronto Stock Exchange before the results were released, were up more than 10 per cent in after-hours trading.

Analyst Nick Agostino called the results “awesome,” noting the market was concerned about earnings per share growth and share losses.

“We believe the company just dispelled those views,” said Agostino of Toronto-based Research Capital.

Agostino also said holiday promotions in North America likely helped in the quarter and international sales likely continue to be strong.

The company said it added about 4.4 million net new BlackBerry subscribers in the quarter to bring its total user base to approximately 36 million.

Balsillie said the company shipped more than 10 million BlackBerry smartphones during the third quarter.

“RIM is experiencing a great start to the holiday buying season and the strong Q3 results and Q4 outlook clearly reflect the strength of our diversified product portfolio as well as the success of our efforts to expand into broader customer segments and new geographies while maintaining our strong position in North America,” he said.

In its guidance for the its fourth quarter, the company said it expected revenue between $4.2 billion and $4.4 billion and earnings between $1.23 and $1.31 per diluted share.

Net subscriber account additions in the fourth quarter ended Feb. 27 are expected to be in the range of 4.4 million to 4.7 million.

The average analyst estimate for the fourth quarter had been for earnings of $1.12 per share on $4.1 billion in revenue, according to Thomson Reuters.

Earlier Thursday, RIM announced it had fixed the technical problem that was causing some of its BlackBerry smartphone customers in North America to experience delays receiving email.

RIM said it was investigating the cause of the problem and also said the BlackBerry phone, Internet browsing and texting weren’t affected by the problem.

Scotia Capital analyst Gus Papageorgiou said RIM’s “stronghold” in the business market should continue to grow as the economy recovers, but said its position in the consumer market isn’t being given enough weight.

“With its much faster growth rate, strong distribution partners, strong brand, differentiated service offering and portfolio depth, we continue to believe RIM’s consumer business is being grossly undervalued,” he wrote in a recent note.

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