Research In Motion has posted a profit outlook that fell short of analyst expectations, sending its shares 8 per cent lower, even as the maker of the BlackBerry smartphone posted quarterly earnings that more than doubled.
Revenue surged to $2.24 billion in the three months ended May 31st - up 107 per cent from a year earlier - and the company added 2.3 million subscribers, or about 100,000 more than it expected.
About 60 per cent of the new subscribers came from outside the company's base of business customers, a plus for RIM as it works to diversify.
RIM offered an outlook for its second quarter that appeared to be a letdown for investors. "The disappointment is on the guidance side and hence the reason for the selloff," said Research Capital analyst Nick Agostino.
"It appears as if they are forecasting earnings for the next quarter to be slightly lower than the consensus estimates," said Duncan Stewart, president of Duncan Stewart Asset Management in Toronto.
RIM's shares, which had risen roughly 20 per cent since early April, dropped 7.9 per cent in after-hours electronic trading to $131.10 from their regular-session close of $142.34 on Nasdaq.
The stock dropped even as RIM posted first-quarter earnings that rose sharply from a profit of $223.2 million, or 39 cents a share, a year earlier.
The results were a departure from the Waterloo, Ontario-based company's recent quarters, when it comfortably beat analyst forecasts amid rapid growth.
In its outlook, the company said it expects second-quarter sales of between $2.55 billion and $2.65 billion, and earnings of between 84 and 89 cents a share. It also said it expects to add about 2.6 million new subscribers.
The company said it pushed deeper into the retail market during the first quarter, becoming less reliant on its mainstay business customers.
Almost 60 per cent of the additions during the quarter were "non-enterprise" - RIM's term for small and medium businesses and consumers, RIM co-CEO Jim Balsillie told analysts in a conference call. Such users now represent over 40 per cent of the total of more than 16 million.