Research In Motion's net profit jumped 32 percent in its fiscal fourth quarter, boosted by strong global BlackBerry smartphone sales as it readies next month's North American launch of its PlayBook tablet computer.
Shares of the Canadian company dropped 4.9 percent in after-hours trade immediately following the release of the results.
MATTHEW THORNTON, ANALYST, AVIAN SECURITIES
The February quarter was fine. The May quarter guidance -- shocking might be too strong a word, but it was very weak.
Q1 revenue is below expectations, EPS is below expectations. And they're talking about spending heavily on R&D and sales and marketing for the PlayBook tablet.
ED SNYDER, MANAGING DIRECTOR, CHARTER EQUITY RESEARCH
The problem with the stock right now is that the guidance is markedly below what people had expected. The number was $1.65 EPS and they're guiding for about $1.50, and for lower ASPs and for lower gross margins. So it's a clear sign to investors these guys are going to have to spend more money and that what everybody had feared was going to occur - that they're going to continue to lose traction in the very competitive smartphone business and have to go to the lower-end phones.
Now it's one quarter, but all they need is one quarter of data to run for the doors because there's so much bear sentiment on these guys. They've not performed well in the last two years on smart phones.
What people are worried here is you've got one company, albeit a really good company, but they're trying to take on all the OS development, all the ecosystem development, work with the developers on apps, build the hardware, work with the carriers.. ... Any one company that tries to do this by themselves will probably lose.
For them to not get hurt here, they've got to repudiate their previous stance, embrace probably Android, or some other OS (operating system) that somebody else is developing and move on. And that's very difficult for anyone who's sunk this much money into it and more importantly for anyone whose ego has got the better of them and considers themselves to be ordained to win.
BARRY RICHARDS, ANALYST, PARADIGM CAPITAL
Q4 was a very strong quarter. The guidance for Q1 was a bit more mixed. The company flavored that with some very strong earnings-per-share guidance for the year. Overall it's neutral, slightly positive. The stock is down, but fundamentally it's pretty solid results.
TAVIS MCCOURT, ANALYST, MORGAN KEEGAN
Generally looks like Q4 was in line with expectations, Q1 is a little lower on EPS due to research and development, along with sales and marketing associated with the tablet initiative.
(Reporting by Alastair Sharp, Euan Rocha; editing by Frank McGurty)