Research In Motion (Nasdaq:RIMM) has seen an incredible run-up in 2009, with the stock up 85% since the markets opened in the New Year. With strong earnings and incredible growth, the tech giant has deserved the praise it's received from analysts and investors alike. However, things may be set to cool down for the company known best for its BlackBerry line of smartphones. RIMM announced earnings for Q1 2010 after market close on Thursday, and the outlook left a few questioning whether the company can keep up its blistering pace.

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The Numbers
The BlackBerry maker posted a 33% increase in first-quarter profits over the same quarter last year, beating analysts estimates. Excluding one-time items, RIMM earned $564.4 million, or 98 cents per share, easily topping analysts estimates of 94 cents. Adding to the good news, the company reported that top line numbers rose 53% to $3.42 billion and that its smartphone market share in the U.S. grew to 55% from 40% in the past two quarters. Those are great earnings numbers, particularly for a company that people were already expecting to post lofty results.

Unfortunately, those same expectations did lead to an initial drop in share price in after-hours trading, and the stock finished down 5% after the markets closed on Friday. RIMM's guidance for the second quarter came in slightly below estimates, leading investors to speculate that the stock may be slightly overpriced on implicit expectations. Forecasting earnings per share of 94 cents to $1.03 and revenue between $3.45 billion and $3.7 billion, RIMM's outlook caught many by surprise by coming in at the low end of analysts' estimates for Q2. The company's expectations to sell between 8.1 and 8.7 million new BlackBerry units also came in short of the 8.5 to 8.9 million many analysts had expected for the coming quarter.

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Traders reacted immediately, sending shares down 6% in after-hours trading, with shares trading more than 2% lower by early trading on Friday. Many are speculating that the huge rally the stock saw this year - and in the last three months in particular - was fueled by unrealistic expectations for the firm and that the shares may be overbought. Others are pointing to the release of Apple's (Nasdaq:AAPL) new iPhone 3G S the day after RIMM's earnings report and the resurrection of Palm (Nasdaq:PALM) and its new "Pre" smartphone into the mobile market as indications that the smartphone landscape is becoming more and more competitive with each passing day.

But RIMM shares may still have upward potential. For one, RIMM has increased capital spending to build a wider array of smartphones with great platforms and has ramped up advertising substantially over the past three quarters. Also, the announcement of a new smartphone being added to the RIM stable, the Tour, shows that this company is not content with standing idly by while competitors try to enter a market that many credit the BlackBerry with creating. Not to mention the fact that Research In Motion has blown analyst estimates out of the water in the past two quarters, when expectations were arguably at their highest.

Bottom Line
Many investors will feel pressure to drop their positions in RIMM and perhaps look to capitalize on the growth of some of their competitors, but I think it's unlikely that RIMM will continue to flounder over the next three quarters. I expect strong summer sales coinciding with an increase in consumer spending to set the BlackBerry maker up for a marketing blitz for the holiday season. Along with the introduction of at least one (I wouldn't be surprised with at least one more) smartphone to its line-up, and an ever-growing smartphone market both domestically and overseas, I believe RIMM shares have the potential to get back into the triple digits before the end of 2009. (To learn more, check out The Industry Handbook: The Telecommunications Industry.)