RIM (RIMM) Crushed By Bad Earnings, Shares Off 10%

Telecom & Wireless

Published: September 24, 2009 4:15 pm

Last Updated: April 28, 2020 4:11 am

nok Shares of RIM (RIMM), maker of the Blackberry, closed the regular session at $83.06 immediately after announcing earnings.

Revenue for the second quarter of fiscal 2010 was $3.53 billion, up 37% from $2.58 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 81% for devices, 14% for service, 2% for software and 3% for other revenue. During the quarter, RIM shipped approximately 8.3 million devices.

Approximately 3.8 million net new BlackBerry subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was approximately 32 million.

GAAP net income for the quarter was $475.6 million, or $0.83 per share diluted, compared with net income of $495.5 million, or $0.86 per share diluted, in the same quarter last year.

Traders seemed unusually upset with guidance. Revenue for the third quarter of fiscal 2010 ending November 28, 2009 will be $3.60-$3.85 billion. Gross margin for Q3 is expected to be approximately 43%. Net subscriber account additions will be 4.0-4.3 million. Earnings per share for the third quarter are expected to be in the range of $1.00-$1.08 per share diluted.

Is the growth of the Blackberry decelerating? Has the Apple (AAPL) iPhone started to damage the Blackberry franchise? The market seems to think so.

Douglas A. McIntyre

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