The US Securities and Exchange Commission has upgraded its investigation of Research in Motion’s stock options expensing to a formal inquiry, RIM said.
The news came as the mobile device company reported a whopping 66% rise in revenue for its fiscal fourth quarter, a $561.2m haul over the three months to March 3.
GAAP profit for the period stood at $187.9m, more than ten times higher than fiscal 2006 and a penny shy of a dollar earnings per share.
For the year, the company broke the $3bn revenue barrier to $3.04bn, 47% higher than in 2006. Net income was $634.5m, up from $382.1m.
Over the quarter, which covered the Christmas period, RIM added over one million new Blackberry subscribers, bringing its total to 8 million.
But the revelation of the SEC probe being upgraded, possibly coupled with market over-optimism, took the sheen off the numbers, and pummeled RIM’s stock down about 7% in after-hours trading.
The company had disclosed at the start of March that it had found problems with how it accounted for stock options grants in the past – one of many companies to admit this – and said it would write of $250m of previously reported earnings.
CEO Jim Balsillie, who was responsible for signing off these hindsight options grants, took a partial fall due to the irregularities, losing his chairmanship of the company.