WATERLOO, Ontario—Research In Motion Ltd. yesterday reported fiscal first-quarter 2007 revenue of $613 million, a 35-percent jump from the year-ago quarter, but profits for the quarter of $129.8 million were down slightly from the $132.5 million profit in the year-ago quarter. The company said increases in marketing and administration took a bite out of profits.
RIM shipped 1.2 million devices in the quarter. The company now boasts 5.5 million total subscriber accounts, up from 3.1 million in the year-ago quarter. The company depends on its installed base for sales of upgraded handsets, while it has entered European and Asia-Pacific markets by selling devices to the overseas offices of American companies, according to the London-based market analysis firm Canalys. UBS analyst Maynard Um was bullish on RIM due to expected new subscriber adds later this year, led by new network operator partnerships.
RIM’s stock rose 4.6 percent to $69.03 on the news.
Rival smart-phone maker Palm Inc. reported that its fiscal fourth-quarter 2006 revenue was $403 million, up 20 percent from the year-ago quarter. Profit for the fourth quarter totaled $27.2 million, up from $17.7 million in the year-ago quarter. Palm shipped about 623,000 smart phones during the quarter.
Despite the positive growth in revenue and profit, Palm shares were down nearly 12 percent to $16.48 on the news of its projections for the next quarter. The market appeared to react negatively to Palm’s guidance for its upcoming first quarter, in which it forecast revenue of $380 million to $385 million, well below analysts’ expectations of revenue in the neighborhood of $413 million. Palm said the weakened first-quarter projections, which it called “an anomaly,” were due to seasonality and its decision to stop selling its Treo 650 smart phone in Europe, due to its inability to meet environmental standards.
RIM and Palm compete directly, with RIM having an 8.4 percent share of the worldwide smart-phone market in the first quarter of 2006, up from 7 percent a year earlier. Palm commands 6.2 percent of the global market, a number that is down from its 9.4 percent share a year earlier, according to Canalys. Nokia Corp. dominates the smart-phone market globally with more than 50-percent market share.
