BlackBerry Maker Beats Analyst Views, Raises Its Guidance
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Brian Deagon , On Thursday December 17, 2009, 7:08 pm EST
Allaying concerns about increased competition in smart phones, BlackBerry maker Research In Motion late Thursday posted financial results and guidance that beat analyst views.
Also late Thursday, smart phone maker Palm (NasdaqGS:PALM - News) reported sales that beat views, but its bottom line lagged expectations.
RIM's (NasdaqGS:RIMM - News) shares were up about 12% after hours in the wake of its results, but Palm shares were down more than 4%.
The BlackBerry maker's results for its fiscal third quarter ended Nov. 28 confirmed that it remains a strong player in an increasingly competitive field that includes Apple's (Other OTC:APPL.PK - News) iPhones and handsets based on Google's (NasdaqGS:GOOG - News) Android operating system.
"The numbers were very strong," said Matthew Thornton, an analyst at Avian Securities. "Going into the quarter there was a lot of concern about competitive inroads."
The Ontario, Canada-based company said its revenue rose 41% from the year-earlier quarter to $3.92 billion. Its per-share profit soared to $1.10 from adjusted earnings of 83 cents a year ago. Analysts polled by Thomson Reuters were expecting profit of $1.04 on sales of $3.78 billion.
The company's guidance for the current quarter was another bright spot. "There was a lot of concern about what the guidance would look like," Thornton said.
RIM says it expects sales of $4.2 billion to $4.4 billion, up from its prior guidance of $4 billion to $4.03 billion. Analysts were expecting $4.1 billion. RIM expects profit of $1.21-$1.31 a share, above its prior guidance of $1.00-$1.08 and well above analyst views for $1.12.
The new estimate includes a 3-cents-a-share gain related to the repurchase of 12.3 million shares.
RIM shipped 10.1 million smart phones in the quarter, above the high end of its guidance and beating views for 9.6 million. It shipped 6.7 million phones a year earlier.
RIM expects to add 4.4 million to 4.7 million net new subscribers for this quarter ending Feb. 27. Analysts were expecting 4.4 million.
"The results were strong all the way around," said Mark McKechnie, an analyst at Broadpoint 13Tech. "The concern was that RIM's business with Verizon would be impacted by the Motorola (NYSE:MOT - News) Droid push. While I think that did impact them some, it seems their business in Europe outweighed that."
The Droid is an Android phone that Verizon Wireless started selling Nov. 6.
But RIM, too, rolled out several phones during the quarter, including new models of the Curve and Storm. And on a conference call with analysts, co-CEO Jim Balsillie said RIM would introduce "some very powerful offerings" in the small to midsize business category and in the low-end business area "very soon."
RIM has been buffered by expanded distribution of the BlackBerry in Europe and China.
Research firm IDC estimates that RIM held a 19% share of the global smart phone market in the third quarter, up from 14.6% a year ago. Nokia led with a 38% share, up from 37%, while No. 3 Apple had a 17% share, up from 16.6%.
Vendors shipped 43.3 million smart phones in the quarter, up 4.2% from a year ago. IDC said that while most of RIM's market share came from North America, it "posted significant improvements internationally, with some regions recording triple-digit growth year over year."
The release of new phones such as the Droid and the latest BlackBerrys overshadowed Palm to an extent.
The maker of the new Pre and Pixi smart phones late Thursday reported a much narrower quarterly loss as revenue soared. But while Palm beat analyst sales views, it lost more money than expected.
The company said revenue, excluding certain items, rose 58% from a year ago to $302 million. That figure excludes the impact of subscription accounting required under generally accepted accounting principles. Under GAAP, smart phone makers phase in revenue over two years. But the company, and analysts, emphasize non-GAAP figures. Analysts expected non-GAAP revenue of $266 million.
Palm came out in June with its bet-the-company Pre, which features the open-source webOS operating system. Palm's smaller, lower-cost Pixi came out Nov. 15, shortly before the company's fiscal second quarter ended Nov. 27.
The company reported that it shipped 783,000 smart phones last quarter, far higher than most analyst estimates, some of which barely exceeded 600,000.
The Sunnyvale, Calif., company reported a non-GAAP per-share loss of 37 cents. That's far better than its year-earlier loss of 73 cents, but the consensus of 23 analysts polled by Thomson Reuters called for a loss of 32 cents. Analysts expect a loss of just 4 cents a share in the current quarter, with profit returning in the fiscal fourth quarter.
Many analysts expect the big test for the Pre and Pixi to come in 2010. Only Sprint Nextel (NYSE:S - News)services the Pre and Pixi now, but as soon as January it's expected that Verizon Wireless, and possibly AT&T (NYSE:T - News), will announce service for those phones. |
