BlackBerry shares shoot up 34 percent on record profit

April 4th, 2009 - 12:47 pm ICT by IANS  

Toronto, April 4 (IANS) Shares of BlackBerry maker Research In Motion (RIM) shot up almost 20 percent Friday after the wireless communication leader Thursday posted a record profit of $518.3 million for the last quarter of fiscal year 2009 ending Feb 28.
RIM shares closed at $72.80 on the Toronto Stock Exchange - more than 19 per cent since Thursday.

This is in addition to 14 percent gain the shares made Thursday immediately after the Waterloo-based company put out its quarterly financial results.

Considering that RIM shares have been stuck around $45 since December, the 34 percent gain of the last day belies all speculation about slump in the smart phone market in the current economic climate.

The bounce in the fortunes of the Canadian wireless communication giant come just week after JPMorgan Chase had downgraded RIM, sending its shares downward on the TSX and Nasdaq.

In its report, JP Morgan Chase analysts had said that BlackBerry will find it difficult to maintain its growth rate amid the global meltdown as corporates resort to lay-offs and belt-tightening.

In this climate, the report had added, RIM will be forced to look for non-corporate consumers to sustain its sales in the coming 18 months.

“We believe RIM’s current replacement rate of 69 per cent for full-year 2009 - implying users replace their BlackBerrys every 1.5 years - is unsustainably high in the current environment,” the JPMorgan Chase report had said.

But RIM has not only posted a record profit for the last quarter of its fiscal year, but has also launched online applications store BlackBerry App World on the lines of Apple’s App Store to make its smart phone “sexy” for non-corporate consumers, including teenagers and students.

Currently, BlackBerry has a subscription base of over 21 million in about 150 countries and it has so far sold more than 50 million smart phone devices.

At $72.80 Friday, RIM shares were almost half of the $150-mark they touched early last year.

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