RIM Tastes New High

The company said that orders by clients who were upgrading their handheld devices was the reason for much of the upside. The company added, however, that the increasing percentage of hardware revenue will eventually take a toll on margins.

Even so, higher-margin subscriptions remain strong; in the just-reported quarter, the company signed up 705,000 new subscribers, pushing the total to 6.2 million.

RIMM's announcement of the options probe apparently delayed release of the earnings report for more than an hour. The company's audit committee, with the aid of outside accountants, is still examining past practices but has already determined that "errors were made."

The mistakes will force a restatement of earnings from fiscal 1998 to the present but will likely not have a material effect on the company's operating numbers.

Earnings will be hit by a total of $25 million to $45 million, the company said.

To view Robert Martorana's video take on RIMM results, click here.