BlackBerry maker Research In Motion Ltd (RIM) reported a drop in fiscal second-quarter profit on Thursday because of charges for a patent settlement and said revenue for the current quarter will fall below Wall Street’s expectations.
Shares plunged more than 11 percent in extended trading on Thursday.
Waterloo, Ontario-based RIM earned US$475.6 million, or US$0.83 per share, for the June to August period, down 4 percent from US$495.5 million, or US$0.86 per share, in the same period a year earlier.
EARNINGS
Adjusted earnings totaled US$1.03 per share, excluding a charge for a patent settlement payment to mobile e-mail provider Visto Corp, which claimed RIM was using its technology without a license. That topped analysts’ average estimate of US$1 per share, a Thomson Reuters poll showed.
Revenue rose 37 percent to US$3.53 billion from US$2.58 billion but fell shy of the US$3.63 billion in sales that analysts had expected.
RIM said it added only 3.8 million new subscribers, the low end of its forecast.
RIM also said revenue for the current quarter is expected to be in the range of US$3.6 billion to US$3.85 billion — short of the US$3.95 billion analysts have forecast.
SHIPMENTS
RIM Co-CEO Jim Balsillie said on a conference call with analysts that RIM expects to ship between 9.2 million and 9.9 million new phones in the current quarter as the Canadian company introduces new models. The company is expected to introduce new models of the BlackBerry Storm and Bold this quarter.
Balsillie said possible delays could affect third-quarter expectations but won’t affect the long-term trend of a rapidly growing sector in which RIM has a leadership position. Delays in the release of new BlackBerrys last fall affected earnings but the subsequent quarter surprised on the upside.
After enjoying success in the corporate market for years, RIM has been targeting the consumer market, where the BlackBerry faces intense competition from other smart phones like Apple Inc’s iPhone and Palm Inc’s new Pre. Balsillie said more than 80 percent of new subscribers are consumers.
“The wise person I believe sees this as a rapidly expanding market where the benefit of establishing and holding a lead position will accrue many, many years of benefit,” Balsillie said.
RIM has said its market share of the US smartphone market had grown to 55 percent by mid-June, from 40 percent about six months earlier. The company didn’t update the figure on Thursday.
Balsillie said the average selling price of BlackBerrys this quarter will be about US$320, about US$25 less than in the second quarter. He said the goal is to become more mainstream.
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