RIM reports increased revenue

BlackBerry device maker Research In Motion reported on Thursday that revenue for its fiscal fourth quarter was up, but a negative outcome in an ongoing patent suit could bite into earnings.

The Ontario-based device and software maker said that for the quarter ended 1 March, it recorded revenue of $87.5m compared with $66.1m in the same quarter a year ago. The company said it lost $15m, or 16 cents a share, in the quarter versus a loss of $16.6m, or 11 cents, in the fourth quarter of last year.

Excluding noncash patent litigation fees of $6.9m, the company's loss for the quarter was $5.7m, or seven cents per share.

Analysts were expecting a loss of 12 cents a share, according to a survey from financial research firm First Call.

RIM reported an increase of 71,000 subscribers to its wireless messaging service in the fourth quarter, for a total of 534,000 subscribers. The company sells devices and server software and gets a cut of service revenue for wireless network access. A smaller portion of its business comes from selling radio transmitters.

Handhelds accounted for about 46 per cent of revenue, while services made up 41 per cent. Software licences accounted for six per cent, and radios and other sources made up seven per cent.

The company also reported that fiscal year revenue for 2003 was $306.7m versus $294.1m last year.

"Despite a conservative enterprise spending environment, our momentum continues in both financial and strategic terms. We achieved record net subscriber growth in the fourth quarter while continuing to control expenses and while maintaining a flat cash position with healthy reserves," Jim Balsillie, chairman and co-CEO, said in a statement.

The company had cash and cash equivalents of $340.7m as of March 1. RIM also had long-term portfolio investments worth $190m.

RIM's revenue for the fourth quarter, $87.5m, came in at the high end of the company's expectations. RIM also raised guidance for its current quarter to $90m to $100m from $85m to $90m. The company expects to add 70,000 to 80,000 subscribers in the quarter. For its second quarter, RIM gave revenue guidance of between $95m to $105m.

RIM said it raised outlook because of early indications of sales for the current quarter and new devices and recent partnerships, as well as good subscription rates in Europe and healthy rates in North America.

RIM is embroiled in a number of lawsuits, one of which could affect fiscal 2003 results. The company has been in litigation with holding company NTP over patent infringement. At the end of last year, a jury had ordered RIM to pay $23m to NTP. RIM appealed the decision. On Feb. 28, the United States District Court for the Eastern District of Virginia ordered the two companies to begin mediation discussions but did not make decisions relating to damages and injunctive relief. On March 6, RIM said it would set aside an additional $7m to $8m for its ongoing case with NTP.

In another case, a California judge on Thursday threw out a request by RIM for an injunction against rival Good Technology, in the latest installment of a legal battle between the two companies that may be headed toward trial.

RIM shares closed up almost two per cent, or 26 cents, to $14.46 on Thursday before the earnings announcement. They were up nearly five per cent, or 64 cents, to $15.10 in after-hours trading.

Richard Shim writes for News.com