RIM posts bright holiday outlook despite economy

Research In Motion has delivered a quarterly profit in line with forecasts and a rosier-than-expected outlook that reflects strong holiday sales of its BlackBerry smartphones even as the global economy slows.
Investors were prepared for the fiscal third-quarter results, most of which RIM disclosed earlier this month. More important was the outlook for the current fourth quarter, which includes the crucial December holiday shopping season.
RIM has a range of new Blackberries on the market and the mood for consumer and business spending is uncertain at best. The company has trimmed prices and benefited from heavy promotion from wireless carriers offering its products.
The results initially pushed RIM's shares up 6% to $40.75 in after-hours trading on Thursday, but the stock soon dropped back to near their Nasdaq close at $38.44.
RIM said it earned USD 396.3 mln in the three months ended November 29. That was up from a profit of USD 370.5 mln a year earlier. Revenue rose to USD 2.78 bln from 1.67 bln and RIM expects fourth-quarter revenue of USD 3.3 – 3.5 bln, higher than analyst expectations as compiled by Reuters Estimates.
The company recently launched a series of handsets — a flip phone BlackBerry, the touchscreen Storm and the high-end Bold — in hopes of capturing a broader swath of subscribers. It said it currently has about 21 mln users.
However, the product rollout has also come at a time when big companies and retail consumers alike are cutting costs to conserve cash. This made analysts worried that BlackBerry upgrades and sales could slump.
RIM co-CEO Jim Balsillie said the company has seen "our best-ever start" to the holiday-buying season over the past few weeks.
Meanwhile, Palm Inc., the California smartphone maker, had a wider-than-expected loss of 73 cents per adjusted share, against Wall Street expectations of 43 cents.
The company said its smartphone revenue was USD 171 mln, down 39% from the year-ago period. It reported sales of only 599,000 units, down 13% compared to a year earlier.