RIM stock climbs on share buyback

By Wojtek Dabrowski

TORONTO (Reuters) - BlackBerry maker Research In Motion Ltd announced a share buyback worth up to $1.2 billion on Thursday, but analysts said competitive concerns will continue to exert pressure on the company's stock.

RIM's shares climbed 3.2 percent after the Waterloo, company said it would repurchase up to 21 million shares, or 3.6 percent of outstanding common shares on Nasdaq. RIM hasn't bought back any stock in the last year.

"Although the share repurchase should give investors some comfort, we believe headwind concerns will likely remain, putting the onus on the company to continue to disprove market concerns through earnings strength," UBS analysts Phillip Huang and Maynard Um said in a note on Thursday.

RIM said the share repurchase program, which will run up to 12 months or until purchases are completed, may commence on November 9.

The shares trade at close to $60 on the Nasdaq. In late September, they hit a year high of $88.08. They have a year low of $35.05, set in March.

The buyback plans come at a time when many investors and analysts think RIM faces significant competition from other handset makers that will dent its future growth prospects.

"I don't think RIM buying back shares is going to change that overall perception, but it'll tell people what RIM thinks about it," said Broadpoint Gleacher analyst Mark McKechnie.

RIM's shares dropped more than 6 percent on Monday after Citi Investment Research analyst Jim Suva told investors to sell the stock because "an invasion" of new phones, applications and competition pose a risk for BlackBerry.