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Research In Motion Profit Doubles on BlackBerry Sales
Research In Motion Ltd. said third- quarter profit doubled and gave a forecast that topped analysts' estimates on consumer demand for the BlackBerry e-mail phone, spurring a 12 percent gain in the stock.

Sales of devices with map functions and music players helped propel net income to $370.5 million, or 65 cents a share, from $175.2 million, or 31 cents, a year earlier. Analysts in a Bloomberg survey had estimated profit of 62 cents.

Research In Motion added 1.65 million BlackBerry subscribers last quarter, luring holiday shoppers with new entertainment features, co-Chief Executive Officer James Balsillie said. Lower prices for e-mail service plans and retailer ad campaigns also spurred sales.

``These numbers are very strong, thanks to a consumer push,'' said Peter Misek, an analyst at Canaccord Capital Corp. in Toronto. He advises buying the stock, which he doesn't own. ``The momentum is still clearly there, and they are able to get new designs out in the market faster than anyone else.''

Research In Motion rose $12.37 to $119.50 in extended trading after the report. The shares had climbed $4.86, or 4.8 percent, to $106.99 at 4 p.m. New York time in Nasdaq Stock Market trading. They have more than doubled this year.

Forecast

Profit in the fourth quarter will rise to between 66 cents and 70 cents a share, the company said. Sales will increase to between $1.8 billion and $1.87 billion. Analysts in the Bloomberg survey had estimated profit of 66 cents on sales of $1.76 billion.

The company said it expects to add 1.82 million subscribers in the fourth quarter. Analysts on average estimated about 1.88 million, according to Morgan Keegan analyst Tavis McCourt.

Sales doubled to $1.67 billion in the third quarter, which ended Dec. 1, the company said in a statement. Analysts had projected $1.65 billion.

AT&T Inc., Verizon Wireless and other phone companies pay Research In Motion for each subscriber that uses BlackBerry e-mail. The fee is about $6 a month, estimates Goldman, Sachs & Co. analyst Brantley Thompson.

``The story continues,'' Matthew Kelmon, a fund manager at Kelmoore Investment Co. in Palo Alto, California, said in a Bloomberg Radio interview. ``They continue to sell devices at a remarkable clip. As networks get better, you're going to see better products and they're the leader.''

Next year's revenue growth will come from China, Kelmon said.

Shift to Consumers

Research In Motion fended off competition last quarter from Apple Inc., whose iPhone went on sale in June, as well as e-mail devices from Nokia Oyj and Motorola Inc. Sales on Black Friday, the day after Thanksgiving, broke the company's one-day record, Balsillie said on a conference call today. Black Friday is considered the start of the holiday shopping season.

``The thing we learned this year is the retail programs are really good,'' said Balsillie, 46. ``We've got to do more of that in more places really fast. ''

Small businesses and consumers accounted for about half of all new subscribers last quarter, up from about 30 percent in the second quarter. Most of the company's sales have come from larger businesses, which buy BlackBerrys for their workers.

Balsillie said in October that his company was benefiting from Apple's iPhone, which drew attention to mobile phones with advanced features. Sales of such phones almost tripled in the U.S. in the third calendar quarter, according to research firm NPD Group Inc. in Port Washington, New York.

BlackBerry Curve

Research In Motion's $200 BlackBerry Curve, released in May, helped the company move beyond corporate customers, said Pablo Perez-Fernandez, an analyst with Global Crown Capital in San Francisco. The device has a media player and a camera of similar quality to the one in the iPhone. The Curve is the company's smallest and lightest device with a full keyboard.

Research In Motion also boosted sales with the $99 Pearl, which is smaller than other BlackBerrys and has no full keyboard, said Perez-Fernandez, who advises buying the company's shares.

``They're going to continue to pump out winning products,'' Robert Pavlik, who helps manage $325 million as Oaktree Asset Management's chief investment officer in New York, said today in an interview on Bloomberg Radio. Consumer demand ``is going to be driving this company forward.''

Research In Motion may release a touch-screen BlackBerry next year, challenging the iPhone more directly, Oppenheimer & Co. analyst Lawrence Harris said in a report this month. The iPhone operates without a keypad, letting users make calls and surf the Web by tapping on its screen.
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