Research in Motion 1Q Earnings – $132.5 Million

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Research in Motion Ltd., maker of the popular BlackBerry wireless e-mail device, reported it more-than-doubled first-quarter profit on Wednesday, but investors reacted negatively to the results and RIM’s shares fell over 7 percent in recent after-hours trading.


The Canadian company also raised its second-quarter sales outlook, though it left its earnings guidance for the period unchanged. RIM’s shares fell $5.66, or 7.4 percent, to $70.25 in recent after-hours activity.

The Waterloo, Ontario-based company earned $132.5 million, or 67 cents per share, in the three months ended May 28, up from $55 million, or 28 cents per share, a year ago. Excluding litigation charges and certain tax adjustments items, RIM said it would have earned $110.1 million, or 56 cents per share.

Revenue surged 68 percent to $453.9 million from $269.6 million. Sales were up 12 percent from the immediately preceding quarter.

Analysts surveyed by Thomson Financial expected earnings of 55 cents per share and sales of $452.2 million — the high end of the company’s April guidance for earnings of 51 cents to 56 cents per share on sales ranging from $430 million to $455 million.

The total number of BlackBerry subscribers increased 24 percent, or 592,000, to about 3.11 million, from 2.51 million subscribers at the end of the fourth quarter. The figure edged out the high end of the company’s projected range.

Turning to the second quarter, RIM predicted sales of between $465 million and $490 million, but kept its earnings guidance at 57 cents to 63 cents per share. The company previously predicted sales of $460 million to $485 million. Analysts expect profit of 61 cents per share on sales of $482.1 million.

The company expects to add between 620,000 and 650,000 subscribers during the period.

Looking further ahead, the company forecast third-quarter earnings of 62 cents to 68 cents per share on sales of $525 million to $550 million. Analysts project the company will earn 64 cents per share on sales of $522.4 million in the quarter.

RIM — which also provides e-mail service to its Blackberries over cellular networks — has struggled with service outages in recent weeks, and continues to face legal expenses related to a patent dispute with NTP Inc. of Virginia. Privately held NTP owns a number of patents on wireless e-mail devices and RIM recorded litigation expenses of $6.5 million related to this dispute in the first quarter.

Shares of RIM, which closed earlier down 69 cents to $75.91 on the Nasdaq, are down about 7 percent so far this year.

Its stock got a boost last Wednesday, however, when the patent office issued preliminary rejections to two of NTP’s patent challenges, meaning the office has backed RIM on four of the five disputed patents. RIM has already agreed to settle with NTP Inc. for $450 million, though the company has said the deal could fall through, reopening NTP’s request that the courts bar RIM from offering the BlackBerry service in the United States.