Earnings Recap: Research in Motion

BlackBerry manufacturer Research In Motion exceeded analyst expectations when it reported Q3 earnings Thursday after the close.  Earnings came in at $1.10 / share, a $0.06 surprise, and forecasts for the next Q were raised to $1.23 – $1.31 / share, strongly outpacing analyst estimates of $1.12.

Perhaps of even greater importance is the apparent resurgence in investors’ confidence in the smart-phone maker. RIMM, once the apple in the eye of the street, had fallen demonstrably out of favor after reporting a lackluster 2nd Quarter in late-September.  After gapping down from the low-$80’s into the $60’s, shares traded into the $50’s before embarking on a bit of a comeback leading into yesterdays report.

Having assuaged the fears of many that the onslaught of competition in the smart-phone arena had proven too much for the Canada-based company, it looks as if shares may be poised to resume a leadership role in the NASDAQ, as well as the market in general.

Shares closed the day off their high, but still maintained much of the strong gap up from the open, trading in the highest daily volume the shares have seen since RIMM last reported earnings.  Then, shares followed the direction of the gap for more than a month before beginning to become more range bound, and it wouldn’t be surprising if the same happened here.  Shares won’t begin to hit resistance until about the $78-level, and if they can break through, there’s a relatively clear path into the mid-$80’s.

Disclosure: Long RIMM.

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