Research in Motion Soars, but Palm Tumbles
Research in Motion (RIMM) reported a Wall Street-beating 58% earnings jump during a quarter that saw the company sell a whopping 10.1 million handsets and add 4.4 million new subscribers. Palm (PALM), on the other hand, missed the Street's earnings expectations and reported an $85 million loss amid indications of less-than-impressive sales.
RIM shares soared 13% in after-hours trading. Palm's went south, taking an after-hours dive of over 4%.
RIM's strong showing is particularly impressive given the white-hot competition in mobile phones right now. Apple's (AAPL) iPhone continues sell like gangbusters, while Google's (GOOG) Android-powered line of phones looks increasingly like a strong threat. In addition, the major carriers, including Verizon Wireless (VZ and VOD) and AT&T (T) are duking it out in an advertising war over coverage.
In short, RIM is more than holding its own amid a frenzied marketplace. The results reaffirm the BlackBerry's central role in the competitive lansdscape, which is pushing Palm out to the margins.
While Wall Street was looking for RIM to post earnings of $1.04 per share, it came came in at $1.10 per share, or $628.4 million. Overall revenue was $3.92 billion, up 11% from the previous quarter and up 41% from the same quarter of last year.
"We are pleased to report record shipments of more than 10 million BlackBerry smartphones during the third quarter with higher-than-expected revenue, earnings and subscriber growth," Jim Balsillie, co-CEO at RIM said in a statement. "RIM is experiencing a great start to the holiday buying season," he said, touting the "success of our efforts to expand into broader customer segments and new geographies while maintaining our strong position in North America."
For Palm, the picture wasn't pretty, despite a pair of well-received new phones, the Pre and the Pixi.
It shipped only 783,000 smartphones during the quarter, a 5% decrease from last quarter. Smartphone sell-through, however, was only 573,000 units, down 29% from last quarter, suggesting ominously that Palm may be shipping phones, but consumers are passing them by, leaving them on the shelves.
Of course, Palm CEO Jon Rubinstein, the much-heralded former Apple executive brought to revive Palm's flagging fortunes, sought to put a positive spin on the numbers.
"We are continuing to execute strongly against our long-term strategy with the delivery of Palm Pixi, the new carrier launches completed this quarter, and the upcoming opening of Palm's full developer program," said Rubinstein in a statement. "We're still in the early stages of a long race, and we're energized by the opportunity to compete in this exciting market."