RIM Beats Its Own Targets (RIMM)

Research in Motion Ltd. (NASDAQ: RIMM) posted earnings of $0.90 EPS and $3.46 billion in revenue.   Thomson Reuters (First Call) had estimates of $0.83+ EPS and $3.4 billion in revenue. The company had already guided down expectations in recent weeks to around $0.83 EPS and roughly $3.35 billion in revenue.  While the earnings data is important, today is really all about just how much tomorrow’s move had already priced into the news.

The company added about 3.9 million new subscribers in the quarter, and the account base is now roughly 25 million.  It shipped 7.8 million units in the quarter.  RIM’s gross margin came in at 40% for the quarter, right as we were expecting.

The company’s guidance for the quarter is $0.88 to $0.97 EPS and $3.3 to $3.5 billion in revenues and estimates are $0.82 EPS and $3.35 billion in revenues. It also expects 3.7 to 3.9 million new subscribers in the quarter.

The revenue breakdown for RIM’s last quarter was 83% for devices, 12% for service, 2% for software and 3% for other revenue.  It is still a ways off before the services (subscriptions) becomes a full component of the company’s revenues rather than just new smartphone sales.

Today’s conference call may hinge around the launch of the apps store and also the launch of a hybrid phone that has a touchscreen and option for normal keyboard.

Shares were already up 7.6% to $49.09 today, and shares are surging by over 15% to $57.00 in after-hours trading.

JON C. OGG
April 2, 2009