RIMM seems like the idea was good...
RIM sees profit, ups forecast; stock down
Wednesday June 29, 5:59 pm ET
By Jeffrey Hodgson
TORONTO (Reuters) - Research In Motion Ltd. (Toronto:RIM.TO - News; NasdaqNM:RIMM - News) reported a stronger first-quarter profit on Wednesday and raised its second-quarter sales forecast, boosted by sizzling demand for its BlackBerry wireless e-mail device.
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But its stock fell in after-hours trading as the numbers failed to meet the lofty expectations of some investors, and attention returned to RIM's legal troubles.
RIM reported net income rose to $132.5 million, or 67 cents a share, in the quarter ended May 28 from $55 million, or 28 cents a share, in the corresponding period a year earlier. Adjusted to exclude litigation charges and a tax recovery, RIM reported a profit of 56 cents per shares.
Revenue at the Waterloo, Ontario-based firm rose to $453.9 million from $269.6 million.
Analysts had expected a profit of 54.5 cents a share before exceptional items, on revenues of $451.9 million, according to Reuters Estimates.
RIM had forecast first-quarter revenues of $430 million to $455 million and adjusted earnings in the range of 51 cents to 56 cents per share.
The numbers disappointed some and RIM shares fell to $72.20 on the electronic Inet brokerage system from their close of $75.91 on Nasdaq.
"It's typical whisper-number expectations getting high going in. But I think here you've got it combined with all these abnormalities going on in the legal side. You have people gaming the stock I think," said American Technology Research analyst Rob Sanderson.
"Now that the numbers are out, it's 'what's the next data point?' We're back in this legal limbo."
RIM shares tumbled earlier this month when the company disclosed it had reopened its legal battle with NTP Inc. after failing to finalize a $450 million settlement that would have resolved their bitter and potentially damaging patent dispute.
The news renewed the risk of a court injunction that would halt U.S. sales of RIM's flagship wireless e-mail device.
SECOND QUARTER FORECAST UP
Nevertheless, the company raised its second-quarter revenue forecast to a range of $465 million to $490 million from $460 million to $485 million, and said it expects third-quarter revenues of $525 million to $550 million.
Analysts had forecast second-quarter revenue of $483.6 million and third-quarter sales of $527.7 million.
"The relatively weak Q2 guidance versus current consensus expectations (notwithstanding the relatively strong Q3 guidance) coupled with sustained NTP uncertainty could weigh on RIM shares near-term," Kona Shio, an analyst with research firm Conscius Capital Partners, said in a note to clients.
BlackBerry subscribers increased by 592,000 from the fourth quarter to reach about 3.11 million in the first quarter, more than double the 1.34 million subscribers RIM had a year earlier.
RIM had forecast first-quarter subscriber additions of 560,000 to 590,000. It expects to add between 620,000 and 650,000 next quarter.
RIM said it expects adjusted second-quarter earnings per share of between 57 and 63 cents, unchanged from its previous forecast.
It forecast adjusted third-quarter earnings of between 62 and 68 cents. Analysts had expected an adjusted profit of 60.6 cents in the second quarter and 64.3 cents in the third quarter.
($1=$1.23 Canadian)
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