BlackBerry phone maker Research In Motion Ltd. on Wednesday reported sharply higher earnings for its fiscal fourth quarter but its stock dropped because its revenue fell short of Wall Street expectations.
For the three months that ended Feb. 27, RIM earned $710 million, or $1.27 per share. That was up 37 percent from a year earlier and was nearly in line with analysts’ predictions of $1.28 per share.
Yet its revenue of $4.08 billion, while rising 18 percent over the same period a year earlier, was short of the $4.31 billion expected by analysts surveyed by Thomson Reuters.
The company blamed reductions in inventories held by wireless carriers and lower-than-expected average selling prices for the phones. Those prices are expected to remain low until RIM introduces new BlackBerry models later in the year.
Investors were unmoved by RIM reporting yet another record quarter of BlackBerry sales — 10.5 million devices during the period, topping the previous record of 10 million set in the third quarter.
Shares of the Canadian company dropped 4.6 percent to $70.55 in extended trading Wednesday after the report came out. Earlier, the stock closed down 95 cents, or 1.3 percent, at $73.97.
RIM’s stock had been rising in recent weeks as analysts increased their estimates. Duncan Stewart, director of research and analysis at DSam Consulting, said results wouldn’t have been disappointing compared with Wall Street expectations two weeks ago, but they are now.
RIM, which is based in Waterloo, Ontario, said it added nearly 5 million net subscriber accounts in the quarter, bringing the total to more than 41 million. RIM had 50.3 percent of the smart phone business in North America in 2009, down from 50.7 percent in 2008 but well ahead of No. 2 Apple Inc., according to market research firm Gartner Inc.
Worldwide, however, RIM has just 20 percent of the…