Recession No Cure for CrackBerry Addiction
“Sentiment on the stock has never been worse in our opinion….We are somewhat concerned that earnings, subscribers and unit guidance are all likely to be guided down–sequentially.” Broadpoint AmTech analyst Rob Sanderson said that of Research in Motion in a March 18 note to clients. Boy, was he ever wrong. After market close Thursday afternoon, RIM reported fourth-quarter earnings and revenue that easily bested analyst expectations. Net income for the period was $518.3 million, or 90 cents per share, on $3.46 billion in revenue. Analysts had been expecting 84 cents a share on revenue of $3.4 billion. Gross margins were in line with expectations–40 percent for the quarter and expected to improve to between 43 and 44 percent in the current quarter. Finally, RIM (RIMM) added about 3.9 million net new BlackBerry subscriber accounts during the quarter, raising its total subscriber base to about 25 million.
All in all, a very impressive showing. Certainly, investors were agog over RIM’s financials. Shares in the company spiked on the news, rising more that 20 percent to $59.37 in after-hours trading. “This is wildly better than people were looking for,” said Duncan Stewart, analyst at DSAM Consulting in Toronto. “Getting improvement in both margin and growth at the same is a rare thing.”