RIM Reports, to Review Options
Seemingly weathering a flurry of competitive device releases from rivals including Nokia Corp. (NYSE: NOK), Motorola Inc. (NYSE: MOT), and Palm Inc. , RIM said that earnings for the quarter were $658.5 million, up 7.4 percent from the previous quarter and 34.4 percent from the same period last year, and that the popular BlackBerry mobile email service had added 705,000 subscribers. Revenue and subscriber-growth numbers will not be affected by the stock-option review.
Subscriber growth was the lone potential weak spot for the Waterloo, Ontario mobile email provider. Many analysts had expected a new-subscriber number of closer to 800,000, and the lower result may add to concerns over RIM's ability to continue building on its subscriber base of about 6.2 million mostly enterprise users.
Daryl Armstrong, wireless telecom equipment analyst for Citigroup Investment Research, wrote in a note to clients previewing the earnings report that, "evidence is building that their core enterprise franchise is quite solid and seems to see little impact so far from new entrants in the smartphone or handheld market."
Released earlier this month and showcased at the CTIA Wireless IT and Entertainment show in Los Angeles, the new Pearl has gained accolades for its sleek, black design -- a departure from the familiar BlackBerry silhouette -- new features such as a trackball and multimedia functionality, and its relatively low price. With discounts and rebates, the Pearl 8100 sells for $199 from T-Mobile, for now the sole North American carrier offering the phone. (See RIM Polishes Its Pearl and Going Pro(-sumer).)
Early sales results for the Pearl were among the most anticipated news in tomorrow's report. Calling the Pearl "one of the most successful BlackBerry product launches ever," RIM co-CEO Jim Balsillie said, "Net subscriber additions at T-Mobile were significantly higher [after the Pearl debut] than we saw prior to launch."
The company forecast revenue for the third quarter to climb to between $780 million and $820 million. Subscriber adds are expected to be around 800,000.
— Richard Martin, Senior Editor, Unstrung