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Last updated: Monday, June 22, 2009

BlackBerry maker Research In Motion is benefiting from buoyant demand for smartphones, but not as much as some investors had hoped. The Canadian company said on June 18 that fiscal first-quarter earnings rose 33 percent, to $1.12 a share, as sales jumped 53 percent from a year earlier. RIM’s performance reflects rising demand for smartphones, the handheld devices that offer e-mail and other features along with voice calling, even as consumers curtail spending on traditional cell phones and other electronics. The results also demonstrate that RIM is holding its own against formidable rivals, including Apple, maker of the newly updated iPhone, and Palm, which earlier this month began selling the long-awaited Pre. Still, RIM shares initially slumped in extended trading after the report was released, when the company’s projections for the current quarter failed to match expectations of the most optimistic Wall Street analysts. “The hopes were so high that they were impossible to meet,” says Peter Misek, an analyst at Canaccord Adams. “Even a super-athlete can’t jump over a 4-meter bar The expectations just got out of hand.” RIM said it expects to sell 8.1 million to 8.7 million devices, adding 3.8 million to 4.1 million subscribers, in the quarter ending on Aug. 29. Both figures were less than some of the more optimistic analysts had predicted. RIM also called for sales of $3.45 billion to $3.7 billion this quarter and expects gross margins, which measure profitability, in the 43 percent-44 percent range. Those forecasts were in keeping with analysts’ average projections. Shares of RIM initially fell 7 percent but recovered to $76.06. In regular trading the stock had slipped less than 1 percent, to $76.55. “Spectacular” Products Ahead RIM Co-CEO Jim Balsillie allayed concerns in a conference call with analysts, saying he expects a surge in the second half of the calendar year and…

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RIM: Big Plans for the Second Half

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