RIM Meets Lowered Q3 Expectations
Net income for the quarter was $396.3 million, or $0.69 per share, compared with net income of $495.5 million, or $0.86 per share, in the prior quarter and net income of $370.5 million, or $0.65 per share, in the same quarter last year.
The company warned on Dec. 2 that it would not match previously anticipated revenue levels for the quarter, cutting expectations to between $2.75 billion and $2.78 billion. RIM said the lowered forecast came from signing on "fewer new subscribers than it had been expecting for the period." (See RIM Bids for Certicom's Phone Security.)
Many took this as an indication that the firm's introduction of its first touch-screen device -- the Storm -- with Verizon Wireless had not been as successful as hoped. RIM said it added 2.6 million BlackBerry subscribers during the quarter, expanding its user base 14 percent. (See Storm Brewing for Verizon, Vodafone.)
"We are pleased to report record revenue results for the third quarter and we have entered the fourth quarter with strong momentum despite the challenging general economic conditions. In fact we have enjoyed our best ever start to the holiday buying season over the past few weeks," said Jim Balsillie, Co-CEO at RIM, in a statement.
The company is now predicting that revenue for the fourth quarter, which ends in February, will be between $3.3 billion and $3.5 billion. Shares in the handset vendor were buoyed by the news, rising up to 10 percent in after-hours trading.
— Dan Jones, Site Editor, Unstrung