RIM Revenues Surge on Demand for New BlackBerry UnitsBy Kathleen A. Martin | Posted 2008-12-19 Email Print
The maker of BlackBerry cell phones and wireless e-mail devices saw sales jump 66 percent in its third quarter and is projecting robust business into the next quarter. Rival Palm reported revenues sank $350 million.
Research in Motion announced that third-quarter sales jumped 66 percent compared with a year ago. RIM closed at $38.44 today, down 5.48 percent on expectations of a miss, but jumped almost 10 percent in after-hours trading. Profit grew 7 percent over last quarter with reported revenue of $2.78 billion for the quarter ending Nov. 30.
"We are pleased to report record revenue results for the third quarter and we have entered the fourth quarter with strong momentum despite the challenging general economic conditions," co-CEO Jim Balsillie said in a statement.
"RIM launched an unprecedented number of BlackBerry smartphones in the third quarter and these new products are being adopted at an even faster pace than we expected," Balsillie said. "Our industry leading product portfolio is positioned well to capitalize on the increasing market opportunity in the fourth quarter of fiscal 2009 and beyond."
RIM also announced 2.6 million subscribers were added in the third quarter, bringing the total BlackBerry accounts to 21 million, up 14 percent.
Analysts were surprised that RIM’s fourth quarter guidance is above Wall Street estimates. The guidance is for revenue to be in the range of $3.3 billion to $3.5 billion with earnings per share (EPS) to be in the .83 cents to .91 cents range. Reports show analysts had expected revenue of $2.9 billion and .83 cents EPS for the same period.
Solution providers largely did not participate in the 6.7 million BlackBerry units sold in the last quarter. Users continue to flock to Verizon and AT&T, the national retail outlets representing BlackBerry carriers.
Chris Burgy, CTO at Archer Technology Group, sees most users working directly with the carriers sales teams. "We really haven’t seen much demand from our customer base or they’ve already implemented phones. The value-add to our business [for partnering] is not very high."
Palm announced a fiscal second-quarter net loss as the company struggled through what its chief executive described as "an undeniably difficult period." Palm closed at $2.20, but dropped 13 percent in after-hours trading. Palm announced revenue of $191.6 million, down from $349.6 million last year.