Home
 
Choose Your City
Change City

RIM reports lower Q2 profit of US$475.6M, while revenue moves higher

TORONTO - BlackBerry maker Research In Motion Ltd. (TSX:RIM) says its profits were lower in the second quarter due to charges from a patent settlement, while revenue grew more than 35 per cent.

TORONTO - BlackBerry maker Research In Motion Ltd. (TSX:RIM) says its profits were lower in the second quarter due to charges from a patent settlement, while revenue grew more than 35 per cent.

The smartphone maker, which keeps its books in U.S. dollars, said Thursday it earned US$475.6 million or 83 cents per diluted share in the period, compared with a profit of $495.5 million or 86 cents per diluted share a year ago.

Revenue for the quarter of fiscal 2010, ended Aug. 29, totalled $3.53 billion, up from $2.58 billion.

The results for the quarter included a charge of $112.8 million or 20 cents per diluted share related to a patent dispute settlement with California-based Visto Corp.

Adjusted earnings were $1.03 per share and excluded the Visto charge.

The results compared with average analyst estimates of $1 per share, and fell short of their prediction of $3.62 billion in revenue, according to Thomson Reuters.

In New York, RIM's stock was down more than 10 per cent in after-hours trading after the company's revenue guidance was also less than analysts had expected.

Shares in the company, which reported its results after the close of markets, were down C$2.05 at $90.36 on the Toronto Stock Exchange on Thursday.

In its outlook, the company said it expected revenue for the quarter ending Nov. 28 to be in the range of US$3.60 billion to $3.85 billion, while earnings per share for the quarter are expected to be in the range of $1 to $1.08 per diluted share.

The average analyst estimate for the third quarter had been for earnings of $1.05 per share on $3.92 billion in revenue.

In a conference call with analysts, co-CEO Jim Balsillie said fielded questions from analysts about the company's sales growth in the near future and tried to reassure them that BlackBerrys are making inroads in the consumer market.

"I really want to make it clear that this stuff is going much more mainstream, and we're teed up to go much more mainstream here," he said.

"This is what we've worked on in our device portfolio, our carrier alignment, our services platform... and strong investment around the world."

Balsillie said that he also expects an uptick in enterprise subscribers when new models and features are unveiled in the backend of the third quarter.

Traditionally, the BlackBerry has been popular on Wall Street which helped build its reputation as the smartphone of choice.

In recent quarters, the company has worked with carriers to expand its appeal to consumers, offering deep discounts and buy-one, get-one-free offers on its devices.

Approximately 3.8 million net new BlackBerry accounts were added in the quarter to bring the total subscriber account base to about 32 million. Net subscriber account additions in the third quarter are expected to be between four million and 4.3 million.

Balsillie said the addition of new subscribers was on the "lower range" of the company's forecasts for the second quarter because many of BlackBerry's new Tour phones went to existing customers as an upgrade to their current devices.

He noted that over 80 per cent of the company's new subscribers were non-enterprise customers, or average consumers, rather than corporations giving BlackBerrys to their staff for business purposes.

"This is being driven by the focus of North American carriers of marketing BlackBerry products and services to the consumer," Balsillie said.

 
 
You Might Also Like