BlackBerry revenues, profits swell in Q3

BlackBerry maker Research In Motion posted notable gains in device shipments, revenues and net income in the third quarter, evidence the smartphone vendor continues to ride out a wave of competition from the likes of Microsoft, Apple and Google.

In the quarter RIM reported net income of $628.4 million, up from the $475.6 million it posted in the prior quarter and a significant increase to the $396.3 million it earned in the same quarter last year. The company's revenues clocked in at $3.92 billion, up 11 percent on the previous quarter and 41 percent on the year-ago period.

During the quarter, RIM shipped a whopping 10.1 million devices, in the process netting 4.4 million new BlackBerry subscriber accounts. At the end of the quarter, RIM's subscriber base stood at 36 million.

Further, the company predicted the good times will continue. RIM forecast revenue in the coming quarter of $4.2 billion to $4.4 billion and earnings per share of $1.23 to $1.31 (up notably from the $1.10 per share it recorded in the third quarter).

Not surprisingly, investors noticed: In after-hours trading, RIM's stock jumped more than 13 percent in the minutes following its earning announcement.

The results come at a critical time for RIM, which suffered a massive outage Thursday that cut off some BlackBerry email service to users across North America. Indeed, the company faces a range of challenges from the likes of Google's Android, Microsoft's Windows Mobile and, of course, Apple's iPhone.

However, analysts predict the market for smartphones may well sustain all comers; Gartner recently forecast smartphones will represent 14 percent of all global mobile devices sales in 2009, growing by 23.6 percent from 2008. By 2013, according to Gartner, 38 percent of all handset sales will be smartphones. Meantime, a recent Yankee Group survey showed more than 41 percent of respondents plan to purchase a smartphone as their next device.

"BlackBerry continues to show excellent growth despite the industry slowdown. Its focus on the smartphone market with best-in-class email capabilities has maintained its popularity with business users and consumers alike," wrote ABI analyst Michael Morgan in a recent note on third-quarter handset sales. ABI numbers show RIM as the world's 8th largest handset maker--smartphone or not--with year-on-year shipment growth of almost 40 percent. "ABI Research expects continued growth from RIM in enterprise, consumer and international markets."

UBS analyst Maynard Um was pleased with the results, but also sounded a cautious tone.  "Though we anticipated good results/guidance, both proved better, helping to alleviate some of the more bearish market concerns," he said in a research note. "However, we still anticipate headwinds into calendar Q1 with more competitor products (and carrier launches) at upcoming trade shows and potentially visible competitive pricing pressure (we believe Palm is focused on driving scale near-term rather than profitability, which could disrupt industry pricing)."

For more:
- see this earnings release

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