Late yesterday, Research In Motion reported blow-out earnings, and increased its sales and profit forecast for the current quarter. The beaten-down stock promptly jumped off the carpet and sprung back to life with a 22% surge in after-hours trading.
As my colleague Arik Hesseldahl reported, RIMM just went a long way towards restoring its once-sterling reputation with investors:
The upbeat forecasts and better-than-expected results went a long way toward alleviating concern that RIMM was sacrificing profitability in its battle with iPhone maker Apple (AAPL). RIM’s stock has tumbled from an all-time high of 148.13 in June as the company raised spending on tricked-out phones designed to better compete with the popular music-playing, Internet-connected iPhone. RIM has had a lot to prove to investors, says RBC Capital Markets analyst Mike Abramsky. “The first is coming out of the penalty box on margins,” Abramsky says. “The second is a reset with investors of their confidence in RIM’s leadership in the smartphone industry. Tonight’s results will help them do both.”