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Telecom & Wireless

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

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By Douglas A. McIntyre Updated Published
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nokShares 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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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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