BlackBerry-maker Research In Motion (RIM) lowered its financial guidance for its third quarter, saying it has added fewer new subscribers than expected as the economy slowed.
RIM said on Tuesday that it expects third-quarter adjusted earnings of between US$0.81 and US$0.83 per diluted share for the three months ended Nov. 29.
That is down from an initial forecast of between US$0.89 and US$0.97 per diluted share because of lower than expected revenue and the strengthening of the US dollar in the quarter.
PHOTO: AP
Waterloo, Ontario-based RIM said the adjusted earnings per share excludes a negative impact in RIM’s tax rate because of the significant drop in the Canadian dollar relative to the US dollar in the quarter.
RIM said it expects revenue for the third quarter to be in the range of US$2.75 billion to US$2.78 billion, down from an earlier forecast of a range of US$2.95 billion to US$3.1 billion.
RIM also said it expects 2.6 million net new BlackBerry subscriber accounts in the quarter, compared with its earlier forecast of 2.9 million. The company launched three major new BlackBerry models in the current quarter, but the release date for them was delayed.
Thomson Financial said the average analyst estimate was for earnings of US$0.90 and US$2.93 billion in revenue.
“Initial sales of new products have been very positive and we believe we have the strongest smartphone portfolio in the industry by far, however product launch timing, general economic conditions and foreign exchange volatility have tempered our results in the third quarter,” RIM co-chief executive Jim Balsillie said in a statement late Tuesday night.
RIM said it would report its final third-quarter results and provide guidance for the fourth quarter of its financial year on Dec. 18.
JP Morgan analyst Paul Coster kept his earnings estimate of US$0.86 per share for the fiscal third quarter, which just ended, but lowered his estimate for the quarter ending in February by US$0.2 to US$0.83 per share.
For the next fiscal year, which starts in March, he lowered his earnings estimate by US$0.15 to US$4 per share.
RIM is already a leader in the business smartphone market based on its reliable, direct delivery of e-mail to the device. It recently launched the BlackBerry Bold, a high-end smartphone aimed at global business users.
But RIM also has moved into the consumer market to compete more directly with Apple’s touchscreen iPhone with its BlackBerry Storm touchscreen mobile phone, and it has also introduced a flip phone this fall to appeal to North American consumers. Balsillie said in September that the cost of ramping up production would trim the company’s gross profit margin.
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