RIM profit jumps, outlook underwhelms; stock drops
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 percent 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 percent of the total of more than 16 million.
The company is betting that new product launches, such as its recently announced BlackBerry Bold, will fuel growth for the balance of the year and beyond, despite a slowdown in the U.S. economy.
While top-end handsets like the Bold might appeal mostly to large corporate and government clients, RIM also offers a range of multimedia features for consumers with its Pearl and Curve smartphones.
"To support the anticipated growth in the second half, we have been investing and expanding in a number of areas to ensure that we can scale to meet the opportunity ahead of us," Balsillie said.
That has included moves such as television advertising campaigns, hiring more engineers, and expanding and enhancing its network, he said.
($1=$1.01 Canadian)
(Additional reporting by Frank Pingue; editing by Frank McGurty)
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