RIM Profit Up Sharply, Says SEC Upgrades Probe

Apr 12, 2007

BlackBerry maker Research In Motion reports a sharply higher fourth-quarter profit, adding about a million subscribers and forecasting more growth for the upcoming quarter.

BlackBerry maker Research In Motion Ltd. reported a sharply higher fourth-quarter profit on Wednesday, adding about a million subscribers and forecasting more growth for the upcoming quarter.

RIM also revealed that an informal inquiry by the U.S. Securities and Exchange Commission into past stock-option grants has been upgraded to a formal investigation, adding it plans to continue co-operating with the regulator.

The company said it earned $187.9 million, or 99 cents a share, in the three months ended March 3. That met expectations and was up from a profit of $18.4 million, or 10 cents a share, in the same period a year earlier.

RIM's shares fell 6.9 percent to $136 in after-hours electronic trade, after closing down $2.29, or 1.5 percent, at $146.02 on Nasdaq during the regular session.

The stock closed down C$3.35, or 2 percent, at C$166.46 on the Toronto Stock exchange. The results were released after markets closed.

Carmi Levy, senior research analyst at Info-Tech Research Group, said that although the stock-options investigation is a drag on the company, RIM continues to deliver solid results.

"The company continues to perform and perform strongly, regardless of the progression of the investigation," he said. "You have to ask yourself the question: Is this enough to bring down the company, or is this enough to severely damage them? And the answer on that is an emphatic no."

Last month, RIM announced a $250 million earnings restatement because of errors in how options were granted. As well, co-Chief Executive Jim Balsillie said he would give up his other role as the company's chairman.

Thus far, analysts have viewed the restatement and the options mistakes as disruptive but ultimately immaterial.

RIM's adjusted income was $192.8 million, or $1.01 per share. All the results the company released on Wednesday are preliminary as RIM works to bring its financials up to date in the wake of the restatement.

According to Reuters Estimates, analysts had expected the company to earn 99 cents a share before one-time items, on revenue of $936 million.

The results also met forecasts that RIM provided to investors in December, when it said it would have net earnings of between 92 cents and 99 cents a share and adjusted earnings of between 95 cents and $1.02 a share.

"We are entering fiscal 2008 with very healthy subscriber growth momentum, a strong slate of products and services, exceptional partnerships and a growing market leadership position," Balsillie said in a statement on Wednesday.

The company said it added 1.02 million BlackBerry subscribers in the quarter and finished the period with a total account base of about 8 million.

Revenue jumped to $930.4 million from $561.2 million a year earlier.

For the upcoming first quarter, Waterloo, Ontario-based RIM said it expects revenue of $1.025 billion to $1.075 billion and to add between 1.125 million and 1.15 million subscribers. It expects net earnings of between 99 cents and $1.07 a share and adjusted earnings of $1.01 to $1.09 a share.

Copyright 2007 by Ziff Davis Media, Distributed by United Press International

Explore further: Visa, MasterCard moving into mobile pay in Africa

add to favorites email to friend print save as pdf

Related Stories

BlackBerry revenue falls below a $1 billion (Update)

Mar 28, 2014

BlackBerry reported a steep drop in profit and revenue Friday as it transitions from a smartphone company to a software business under its new chief executive. Shares rose five percent in morning trading ...

BlackBerry slashes jobs in face of $1B 2Q loss (Update)

Sep 20, 2013

It was once so addictive it inspired the nickname "CrackBerry." President Barack Obama confessed to being among the millions of devotees who couldn't bear to stop tapping feverishly away on its tiny keyboard. ...

RIM unveils cheaper BlackBerry (Update 2)

May 14, 2013

Research In Motion unveiled a lower-cost BlackBerry aimed at consumers in emerging markets on Tuesday, and said it will offer its once-popular BlackBerry Messenger service on iPhones and devices running Google's ...

Recommended for you

Visa, MasterCard moving into mobile pay in Africa

13 hours ago

Americans may just be getting used to mobile pay, but consumers in many African countries have been paying with their phones for years. Now payment processors Visa and MasterCard want to get a slice of that market, and are ...

Wireless show highlights: Eyes on Apple, Blackberry

14 hours ago

As a major wireless show continues this week in Barcelona, Spain, Apple is highlighting the capabilities of its iPhone cameras with a gallery of photos taken by its users around the world.

Venture capitalist testifies in Silicon Valley sex-bias suit

21 hours ago

A prominent Silicon Valley venture capitalist who helped direct early investments in Google and Amazon said Tuesday during testimony in a high-profile sex discrimination lawsuit that his firm is not run by men and has many ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.