TORONTO - BlackBerry maker Research In Motion Ltd. (TSX:RIM) sped past analyst expectations once again with a better-than-expected profit, but the company also gave a forecast Thursday that signals the pace of its growth is slowing.
The Waterloo, Ont.-based company, which reports in U.S. currency, posted a US$643 million profit, or $1.12 per share, for the period ended May 30. That was above the $482.5 million, or 84 cents per share a year earlier.
Revenues rose 53 per cent to US$3.42 billion in the three months ended May 30, up from $2.24 billion a year earlier in what is RIM's fiscal first quarter.
But investor optimism appeared to be faltering as RIM's shares moved down in after-hours trading, dropping more than US$4 on the Nasdaq market after the results were announced. At 6:15 p.m. ET shares had regained most of the decline and were down 34 cents to $76.21.
In recent quarters, RIM has benefited from its unwavering growth in the face of a U.S. recession and tough international economy.
In its outlook for the second quarter, subscriber growth is expected to be relatively flat. Revenues are expected to grow slightly from quarter-to-quarter to between US$3.45 billion and $3.70 billion.
The consensus estimate compiled by Thomson Reuters before the announcement was for revenue of US$3.6 billion.
The summer season generally means slower sales, particularly in July and August, said Edel Ebbs, vice-president of investor relations in a conference call with analysts.
"We expect to see some of this impact mitigated by the strength of new products launches, such as the BlackBerry Tour, and new carrier promotions scheduled throughout the summer months," she said.
Research Capital analyst Nick Agostino said that RIM's past success could be working against it as investors continue to expect an outperformance that beats even their own expectations.
"We moved back to that sort of mentality," he said.
"We quickly reverted back to ... where it wasn't going to be enough for RIM to just meet forward guidance, they had to guide higher than the Street expectation."
For its fiscal first quarter, RIM reported adjusted net income was $546.4 million or 98 cents per share, four cents ahead of analyst estimates.
RIM also added 3.8 million new subscribers in the quarter, bringing its overall subscriber count to 28.5 million.
The company also paid lower taxes, booking a tax provision of $56.2 million compared with $182.9 million a year earlier, which helped keep its profits higher.
"The industry leading BlackBerry product portfolio is driving strong customer demand around the world and our penetration of new market segments continues to expand," said co-CEO Jim Balsillie in a release.
"We are particularly excited about the strength of our product portfolio for fiscal 2010 and we are looking forward to driving continued growth and profitability in our business throughout the remainder of the year."
RIM shares ended the regular trading session in Toronto at C$86.80, down 36 cents.
