Then I saw her face, now I'm a believer
Not a trace of doubt in my mind.
I'm in love, I'm a believer!
-- From "I'm A Believer" by Neil Diamond, as made famous by the Monkees
It's hard not to fall in love with Research In Motion (Nasdaq: RIMM ) today. Last night's fourth-quarter report sent the stock on a 20% magic carpet ride, adding more than $5.6 billion to the handset maker's market value overnight. The best news: I think that the rally is sustainable, and based on solid business facts.
"Recession, schmecession," RIM said, reporting an 84% year-over-year revenue increase to $3.46 billion (in American dollars, thank you). That's even 23.5% greater than last quarter, so demand for the company's products is clearly very healthy.
That point was reinforced by 3.9 million net new subscribers during the quarter, and management's expectations to add about that many more in the current quarter. To put that in perspective, a well-respected consumer brand such as TiVo (Nasdaq: TIVO ) has a grand total of 3.3 million subscribers, less than the crowd amassed by RIM in just three months.
Apple (Nasdaq: AAPL ) has sold 17 million iPhones worldwide, and is regarded as the brand to beat in high-end phones. Also, that figure includes more than a few customers who upgraded from one iPhone to another, sexier version -- counting those sales twice. And hey, RIM gets some of that action too -- 7.9 million BlackBerry units shipped out this period, so a back-of-the-envelope calculation shows that about half of them were upgrades to replace an old digital leash from the same company. RIM has 25 million current subscribers under its belt, and it's not done growing by any means.
Operating expenses increased by just 3.2% over last quarter, showing some fiscal discipline. Earnings came in at $0.90 per share, 25% above last year's $0.72 per share. Mighty Apple will be hard-pressed to match these growth figures when it reports earnings in a couple of weeks. Traditional phone giants such as Nokia (NYSE: NOK ) , Motorola (NYSE: MOT ) , and Sony Ericsson might be fine investments for other reasons, but they're all eating RIM's dust.
I've been a BlackBerry skeptic, largely because the smartphone market is bristling with highly capable competition. But you just can't argue with growth like this. The BlackBerry fans are sticking around -- and telling their friends. In my Foolish opinion, this stock has barely begun its recovery from last year's heart-stopping drops.
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