BlackBerry maker Research In Motion Ltd. reported another solid quarter, although its results were pulled down by its settlement expenses with patent-holding company NTP Inc. and its higher-than-anticipated tax provisions.
The company’s mixed results gave investors pause, with RIM’s stock falling slightly after its results to $73.69 per share. However, analysts generally issued positive views on the company’s results, with expectations of continued successes.
“With the NTP issue now behind it, RIM can focus on executing its global strategy of growing BlackBerry subscribers through both RIM devices as well as BlackBerry-enabled devices,” wrote Jason Tsai of ThinkEquity Partners in a research note. The firm makes a market in RIM securities. “We would view weakness in the stock as a good buying opportunity.”
Others, however, issued notes of caution. Piper Jaffray warned that some carriers may reduce their BlackBerry inventories in expectation of competing products. RIM’s handset sales were slower than many analyst firms had expected in the quarter, which the company attributed to U.S. carriers working to reduce their handset inventories.
“We believe a larger selection of both competitor and BlackBerry Connect devices will increase pricing and margin pressure for RIM devices,” wrote T. Michael Walkley of Piper Jaffray in a note to investors. The firm makes a market in RIM securities.
RIM reported revenues for the fourth quarter of $404.8 million, up 92 percent from its $210.6 million in the same quarter a year ago. The company’s BlackBerry subscribers increased by 470,000 to a total of 2.51 million. However, the company reported a net loss of $2.6 million in the quarter compared with net income of $90.4 million in the same quarter a year ago. The net loss includes an expense of $294.2 million in relation to the company’s settlement with NTP, as well as a write-up of its deferred tax asset.
In the coming quarter, RIM expects to report revenues of between $430 million and $455 million and earnings per share of between 51 cents and 56 cents per share.
“Fiscal 2005 was a landmark year for RIM as the BlackBerry subscriber base more than doubled and revenue grew past $1 billion for the first time. Momentum continued throughout the fourth quarter with subscriber growth and operating results both exceeding expectations,” said Jim Balsillie, RIM’s chairman and co-chief executive officer. “We continue to execute our business plans effectively as demand for BlackBerry grows around the world. RIM expects to surpass 3 million BlackBerry subscribers in the current quarter, and we are planning to launch BlackBerry with an additional 100 carriers this year.”
