April 11, 2001 8:00pm
RIM CEO calls sector slowdown "mythical"
By John G. Spooner, ZDNet News
UPDATE Research In Motion, which makes the popular BlackBerry pager, beat analyst expectations for its fiscal fourth quarter on Wednesday and offered a bright outlook for the year.
Co-CEO Jim Balsillie said reports of a drop in handheld sales aren't affecting his company.
"This sector slowdown is mythical," he said. "We didn't see a slowdown in demand. And as a result, we're reiterating guidance for the quarter and the year...We remain cautiously optimistic immediately, but we expect to hit a homerun this year."
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RIM CEO calls sector slowdown "mythical"...
UPDATE 2-RIM posts strong quarter, beats estimates...
UPDATE 1-RIM posts strong quarter, beats estimates...
RIMM: News Profile Chart Estimates
Investors liked what they heard from RIM (Nasdaq: RIMM). Although it shares closed down 11 percent to $21.93 in regular trading, they shot up 24 percent to $27.24 in after-hours trading, according to Island ECN.
Excluding charges, RIM earned $8.3 million, or 10 cents per share, for the quarter that ended Feb. 28. That's a huge increase from its earnings of $3.2 million, or 4 cents per share, for the same period last year. A consensus of analysts had expected the company to earn 7 cents per share.
RIM's revenue for its fourth quarter came in at $90.1 million, a 249 percent jump over the same period a year earlier and a 46 percent increase over its third quarter. Analysts were expecting $75 million in revenue for RIM's fourth quarter.
Including a $14.8 million charge for declines in long-term investments, the company lost $6.5 million, or 8 cents per share, in its fourth quarter.
The company boosted its subscriber base to 164,000 at 7,800 companies by the end of the quarter, compared with about 120,000 at the end of its third quarter.
RIM makes the BlackBerry, an always-on two-way pager that lets people receive and send e-mail.
The better-than-expected quarterly results should buoy spirits in the handheld world as they show that the public hasn't lost its taste for portable technology.
For the full fiscal year, RIM actually lost some ground. Excluding charges, it reported earnings of $8.5 million, or 11 cents per share. That compares with $10.5 million, or 14 cents per share, for the previous fiscal year. Analysts were expecting the company to earn 7 cents per share for its fiscal year.
Including charges, the company lost $6.2 million, or 8 cents per share, for its fiscal year.
Revenue for the fiscal year came in at $221.3 million, compared with $85 million for the previous fiscal year. Analysts expected the company's revenue to come in at $206 million.
Despite a possible slowdown in corporate spending, RIM executives described the company's outlook as strong. RIM expects its fiscal 2002 revenue to reach $370 to $390 million, executives said during a conference call.
"We believe that (economic) strength at the end of the year will more than make up for (current) macroeconomic situations," Dennis Kavelman, the company's chief financial officer, said during the call.
RIM also intends to maintain its position in the market with next-generation, voice-driven pagers based on GPRS (General Packet Radio Services) and CDMA (code division multiple access) networks.
The company is almost ready for the beta of its handhelds in the United Kingdom, where it has inked a deal with BT Cellnet. The company has also signed memorandums of agreement in Ireland and in other European countries. It intends to launch the new products in the second quarter.
"I personally used the product in London (last week) and found the experience to be both solid and fast," Balsillie said during the conference call.
The products will become available in North America later in the year. RIM is also developing new market-specific designs, which it plans to launch next year.
In related news, Palm on Wednesday announced it is cutting prices to clear an inventory glut. Handspring announces its earnings Thursday. |
