RIM delays profit report, plans to review stock options scheme

BlackBerry creator Research In Motion (RIM) delayed its quarterly earnings report as it joins the growing list of companies that may have improperly handled stock options grants to top executives, an Associated Press report said.

The Associated Press report quoted the Canadian company as saying that an internal investigation has arrived at a preliminary conclusion that it will need to restate past earning statements to correct accounting errors that reduced options reported expenses by $25 million to $45 million from 1998 to the present.

Despite the worrisome disclosure, RIM's shares soared in after-hours trading, rising $13.94 per share, or 16.2 %, to $100, in apparent reaction to an abridged quarterly update, the report said.

In tandem with the announcement, RIM issued a preliminary report on its just-ended second quarter, saying revenue rose 34.4% to $658.5 million, compared with $490.1 million in the same period last year, the report added.

About 705,000 BlackBerry subscriber accounts were added in the period, for a quarter-end total of 6.2 million.

The audit committee on the board of directors 'is completing a management-initiated, voluntary review of RIM's historical option granting practices,' RIM said in a statement, saying it decided to be 'proactive' due to the 'heightened public awareness and concern regarding stock option grant practices,' the report said.

 

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