Research In Motion Limited (RIMM) recently reported better-than-expected third-quarter 2010 results. The quarterly earnings of $1.10 per share beat the Zacks Consensus Estimate of $1.04, and soared 59.4% from 69 cents delivered in the prior-year quarter, resulting in more than a 12% jump in the stock in after-hours trading yesterday. This morning it hovers around $70 per share.

Management now expects fourth-quarter 2010 earnings in the range of $1.23 to $1.31 per share.

The company said it shipped a record-breaking 10.1 million smartphones units Incorporatedluding its 75 millionth BlackBerry smartphone, which remains one of the strongest products in the smartphone category. The company expects to ship between 10.6 million and 11.2 million units at an average selling price of $320, in fourth-quarter 2010.

The company, which faces stiff competition from Apple’s (AAPL) iPhone and Motorola’s (MOT) Droid, said it added 4.4 million net new BlackBerry subscribers in the quarter, bringing its total subscriber base to 36 million. The company expects to add 4.4 to 4.7 million BlackBerry subscribers in fourth quarter.

Total revenue surged 41.1% to $3,924.3 million. The sales break-up for the quarter was nearly 82% for devices, 14% for service, 2% for software and 2% for other revenue. The BlackBerry maker now expects fourth-quarter revenue between $4.2 billion and $4.4 billion.

The company, which focuses on corporate customers, is expanding its customer base by offering a diversified product portfolio and increasing its geographic reach.

The higher revenues were to some extent shaved off by a rise in cost of sales (up 48.7%), which resulted in 290 basis points’ decline in gross margin to 42.7%. Management expects gross margin to increase sequentially by 80 basis points.

Zacks Investment Research

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