TORONTO - Research In Motion Ltd. (TSX:RIM) reported an increase in first-quarter profit to US$482.5 million Wednesday, as revenue more than doubled, but fell short of analyst expectations.
Shares in the BlackBerry maker fell 10 per cent in after-hours trading, after ending the trading day up C$2.07 at $143.85 on the Toronto Stock Exchange. RIM released its results after the close of markets.
The Waterloo Ont.-based company, which reports its results in U.S. dollars, said its profit amounted to 84 cents U.S. per diluted share for the three months ended May 31 compared with a profit of $223.2 million or 39 cents per diluted share a year ago.
Revenue in the quarter was as $2.24 billion, up from $1.08 billion.
The average analyst expectation was for a profit of 87 cents per diluted share, according to Thomson Financial and revenue of $2.29 billion.
RIM co-chief executive Jim Balsillie said the company expected revenue for the second quarter to be in the range of $2.55 billion to $2.65 billion, while earnings per share were expected to be in the range of 84 to 89 cents per share diluted. Net subscriber additions in the second quarter are expected to be approximately 2.6 million.
"We believe that the strong product portfolio we have, together with the continued commitment by our carrier partners to promote BlackBerry throughout the summer months, will allow us to post healthy growth in Q2,'' Balsillie said in a call with analysts.
"Summer is a busy time at RIM, and this summer will be especially so as we gear up for what could be our strongest second half ever, with several exciting new product launched planned, and strategies in place to leverage the tremendous success we've had to date in penetrating new market segments and geography.''
RIM is readying itself for showdown with Apple Inc. this summer, as both companies prepare to launch new smart phones.
RBC Dominion Securities Inc. analyst Mike Abramsky issued a note to investors earlier Wednesday expressing his concern for the company's highly touted rollout of the BlackBerry Bold, due in August.
He said information suggests the carrier may have to delay the rollout of the new phone in the United States by two or three weeks as it works to mesh the device with its network.
Abramsky said "second-quarter guidance is highly sensitive to Bold launch timing'' and could reduce revenue to between $2.5 billion and $2.6 billion from an earlier estimate of $2.6 billion to 2.7 billion.
Abramsky added that Canadian carrier Rogers Wireless (TSX:RCI.B) appears to be ready to launch next month, while other international carriers rollout in August. He rated the company as an "Outperform'' with "Above Average Risk.''
During the call, Balsillie told investors and analysts that RIM's market share continued to grow, and in first quarter, the U.S. share "increased substantially and was more than double that of our nearest competitor, whose share decreased significantly from the prior quarter.''
"We also saw growth in international markets, particularly in Latin America and the U.K.,'' Balsillie said.
The company said it added 2.3 million net new BlackBerry subscribers in the quarter, six per cent higher than the fourth quarter, to bring the total to subscriber base to over 16 million. RIM also shipped about 5.4 million devices in Q1.
