BlackBerry maker aims for corporate market
Mark Guibert, vice president, RIM
The maker of the BlackBerry two-way e-mail pager earned $3.8 million, or 5 cents per share, on revenue of $77 million for the quarter ended June 2.
Analysts had expected RIM to report earnings of 5 cents per share, with several analysts pegging revenue somewhere between $75 million and $80 million.
In the same quarter last year, RIM earned $400,000, or less than 1 cent per share, on revenue of $27.1 million.
"We're pleased that we've been able to continue to perform well in a challenging economic environment," Jim Balsillie, RIM's co-chief executive, said in a statement.
RIM's customers are primarily corporations. The company's earnings come as the more consumer-oriented handheld makers Palm and Handspring have warned that their sales will come in at roughly half of what they predicted at the start of the current quarter.
RIM said it matched estimates despite reported inventory issues at some of the companies that resell the BlackBerry.
"Results were in line with expectations despite some areas of weakness in the BlackBerry reseller channel," said Dennis Kavelman, RIM's chief financial officer. "We are maintaining guidance for the second quarter and maintaining our positive outlook on the second half of the year."
RIM shares rose $1.86, more than 6 percent, to $29.40 in regular trading Thursday.
Kavelman reiterated expectations for the company's fiscal second quarter that ends in September, saying revenue should be around $80 million. Revenue for the third quarter ending in November should be around $95 million to $105 million. For the year, the company expects revenue of $370 million to $390 million.
Balsillie added that expectations for the second and third quarters as well as for the year do not include estimates for business from hardware partner AOL Time Warner. The media conglomerate introduced the $329 AOL Mobile Communicator pager last fall as part of the AOL Anywhere strategy to make AOL services available anywhere to its 30 million subscribers.
Analysts heralded the deal as a potential windfall for RIM, but a recent analyst report indicated the partnership was in trouble because of a squabble over the pricing for the pagers.
In response to the report, Balsillie said, "Despite rumors to the contrary, our relationship with AOL remains strong. While no reorder has been made and none is expected at this time, we have not taken them into account in our guidance...Any reorder would be an upside."
Balsillie added that reports RIM was being inflexible with AOL on the price of the pagers were "completely erroneous."
The company reported that it signed up 46,000 new subscribers for a total of 210,000. In addition, companies purchasing RIM products increased from 7,800 in the previous quarter to 9,700.
Balsillie said subscription numbers would only increase with the imminent availability in the United Kingdom of wireless devices based on the GPRS (General Packet Radio Service) standard. The company expects to sign up 50,000 to 55,000 new subscribers next quarter.
Staff writer Richard Shim contributed to this story.