RIMM: FY Q3 In Line With Warning; Q4 Rev Guidance Tops Street Est; Margin Compression Coming; Stock Jumps

Research In Motion (RIMM) posted results for its fiscal third quarter ended November 29 that were in line with the company’s recent pre-announcement. The company posted revenue of $2.78 billion and adjusted profits of 83 cents a share; previous guidance was for $2.75 billion to $2.78 billion and 81-83 cents a share. But the stock is jumping in late trading and here’s why: For FY Q4, the company sees revenue of $3.3 billion to $3.5 billion, with profits of 83-91 cents a share. The Street had been looking for $2.99 billion and 83 cents. The company said gross margin in the quarter is expected to be 40%-41%, down from 45.6% in the November quarter. But it also said that operating expenses as a percentage of revenues would be down 2 points. The company expects FY 2010 gross margins to be similar or slightly better than Q4. In after hours trading, RIMM shares have jumped $3.92, or 10.2%, to $42.36. 42.36 Up 3.92 (10.20%) (link)