Blog Post

RIM Beats Estimates Again, But Growth In Core U.S. Market Slows

BlackBerry may seem to be losing mindshare right now, but that’s not being reflected in the numbers that handset maker RIM reported today. The company today reported Q3 earnings that beat analyst expectations, with revenues of $5.5 billion, a 40 percent increase over the same period a year ago.

RIM (NSDQ: RIMM) doesn’t break out how sales look in different regions, but the Canadian company has been focussing on extending its brand and products into new, emerging markets, and this could be partly behind the company’s strong results. “RIM’s business continues to grow and diversify as BlackBerry adoption accelerates in markets around the world,” noted co-CEO Jim Balsillie in the company’s earnings release.

This pithy-sounding statement should not be taken too lightly. Horace Dediu, an analyst with Asymco, did some of the math and concludes that, astoundingly, RIM’s business outside the U.S. was up by 191 percent. For this quarter last year, the U.S. represented 57 percent growth; this year that’s gone down to 34 percent.

Both Gartner and IDC note that RIM’s smartphone market share declined in Q3 — so even while RIM is selling growing its business, it’s not doing it at a rate that is keeping up with the rest of the market, which has become much more competitive with numerous Android-based devices, Windows-based devices, as well as the iPhone and products from Nokia.

The numbers today, however, still look promising. Analysts polled by Bloomberg had predicted revenues of $5.41 billion. Earnings per share were $1.74, which also beat estimates of $1.65.

Meanwhile, the company reported shipping 14.2 million devices in the quarter, also an increase of 40 percent over the same quarter a year ago.

In the quarter, RIM added 5.1 million BlackBerry subscriber accounts, taking the total to 55 million.

The revenue breakdown for the quarter was approximately 82 percent for devices, 15 percent for services, and 3 percent for software and other revenue.

Today, the company also appointed co-CEOs Jim Balsillie and Mike Lazaridis as co-chairmen of the board. Balsillie had been chairman in the past but stepped down in 2007 after an investigation into stock options and RIM restating its results.