As expected, Research In Motion posted strong results for its fiscal fourth quarter, with both revenue and profits up, though the company's sales failed to meet analysts' expectations.
The BlackBerry maker reported net income in the quarter of $710.1 million, up 13 percent from net income of $628.4 million in the year-ago period. RIM posted revenue of $4.08 billion, an 18 percent jump from $3.46 billion in the year-ago period and up 4 percent from $3.92 billion in the previous quarter. Analysts had expected revenue of around $4.3 billion, according to Thomson Reuters I/B/E/S.
RIM shipped around 10.5 million devices in the fourth quarter, and approximately 37 million devices during all of fiscal 2010. The company added around 4.9 million net new BlackBerry subscriber accounts in the quarter, giving it a total BlackBerry subscriber account base of over 41 million.
The company did report guidance for its fiscal first quarter of 2011 that topped Wall Street expectations, but questions have persisted about RIM's ability to compete in the crowded smartphone market, where it is seen as being vulnerable to challenges from Google's Android platform, Apple and Nokia. Research firm Canalys still predicts RIM to be the North American smartphone leader this year, but its market share is expected to drop from 49 percent to 43 percent. Android, meanwhile, is expected to see its market share jump from 9.7 percent to around 19 percent this year, according to Canalys.
Investors appeared troubled by RIM's earnings announcement; the company's stock fell around 5 percent immediately after the news to around $69 per share in after-hours trading.
RIM brushed aside concerns that its business in North America was faltering, and said that it added more subscribers in the region in the quarter than in the previous period. "North America is doing very, very well," RIM co-CEO Jim Balsillie said on the company's earnings conference call, according to Bloomberg. "Don't misconstrue something that shouldn't be misconstrued."
"Although the quarter disappointed relative to heightened expectations (even when accounting for inventory adjustments), we believe guidance was within higher expectations," UBS analyst Maynard Um wrote in a research note to clients. "However, gross margins are expected to decline through the year ([due to a] new product mix) and average selling price guidance was weaker than expected."
Um said RIM's outlook remains cloudy due to a possible new iPhone from Apple, seasonality in August and increased competition. RIM's average selling price to carriers in the past quarter was $311, a little below analyst expectations, and the company said it will drop to between $305 and $310 this quarter. Balsillie declined to comment on reports that Apple is preparing an iPhone that could work on Verizon Wireless' network.
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