[R]11:00AM New York—Research in Motion reported first quarter revenue increase of 107% to $2.24 billion but issued a disappointing outlook.[/R]

Revenue Doubles on Higher Device Sales

Research in Motion Ltd. said revenue doubled to $2.24 billion in the three months ended May 31, from $1.08 billion a year ago thanks to strong device sales.

The maker of the BlackBerry, the smart phone for business people, issued a shaky outlook, however, dragging the stock 9% down at close last Wednesday, after the results were released.

For the quarter, Research in Motion posted revenue increase of 19% over the fourth quarter ($1.88 billion) with faster growth in devices that contributed 82% of group revenue.

Service revenue accounted for 13% of overall company revenue, 3% from software and 2% from other revenue.

Research in Motion shipped nearly 5.4 million devices in the quarter, adding 2.3 million net new BlackBerry customers, and bringing to a total 16 million its subscriber base.

RIM managed to meet its own targets offered in the fourth quarter. At the time, the Canadian company said it expected revenue in the range $2.23 billion and $2.3 billion, and about 2.2 million new subscribers.

Earnings

The wireless device maker said net earnings leapt 116% to $482.5 million or $0.84 per share in the quarter from $223.2 million or $0.39 per share a year earlier.

Over the fourth quarter, earnings gained 17% from $412.5 million or $0.72 per share, as the company posted its fourth successive quarter of double-digit growth.

Analysts were looking for earnings of 85 cents per share, on revenues of $2.3 billion.

Gross margins fell to 50.7% from 51.8% after expenses increased to $490.9 million in the quarter from $276.2 million same period in 2007.

Research in Motion had total of cash, cash equivalents, short-term and long-term investments of $2.08 billion at the end of the quarter, down from $2.34 billion in the comparable period in 2007 due to a higher income tax payment of $460 million in Canada. It also used $293 million on capital expenditures.

There are concerns that Apple Inc’s iPhone 3G, which comes out next month and supports Microsoft Exchange, will chew into RIM’s customer base.

But company chief executive, Jim Balsillie said RIM hoped to ship “its 40 millionth” BlackBerry smart phone in the summer, which should help shore up profits.

The company is also planning to release a variety of new products later in the year, including the BlackBerry Bold, a 3G device expected to fend off competition, and help sales.

“Our comprehensive technology and business strategies continue to reap strong results in the market and RIM is well positioned to build on its momentum throughout the remainder of fiscal 2009,"" he said.

Disappointing Outlook

RIM second quarter earnings forecasts seemed below market expectations. The company expects between $2.55 billion and $2.65 billion for the second quarter to August 30. Earnings are expected to come in the range 84 cents per share to 89 cents per share.