Investors dumped shares of BlackBerry maker Research In Motion Ltd. following the company’s surprise subscriber shortfall. Although RIM scored earnings ahead of expectations, lower-than-anticipated subscriber numbers sent the company’s stock tumbling more than 11 percent to $68.72 per share.
“We are very pleased with the progress achieved by RIM and its partners over the summer, and we are particularly energized by our prospects for the second half of the fiscal year,” boasted Jim Balsillie, RIM’s chairman and co-chief executive officer. “We are entering the second half with solid market positioning, strong momentum and an impressive line-up of new products and services. As a result, we are now expecting to surpass $2 billion in annual revenue and the 5 million subscriber milestone before the end of the fiscal year.”
RIM posted 620,000 new BlackBerry subscribers during its second quarter, below some expectations. The company blamed the slow summer sales season and said subscriber numbers would jump during the holiday shopping season, which is when RIM plans to introduce new devices. RIM ended the quarter with 3.65 million BlackBerry subscribers.
The company’s revenues clocked in at $490.1 million, up 58 percent from the $310.2 million the company reported in the same quarter a year ago. RIM’s net income popped to $111.1 million from $70.6 million in the same quarter a year ago.
In the company’s third quarter, RIM expects revenues of between $540 million and $570 million and subscriber additions of between 680,000 and 710,000.
Interestingly, RIM used its earnings announcement to defend its e-mail distribution technology, which relies on a Network Operations Center. The company said its NOC approach improves network efficiency, lengthens battery life and offers more security. Competitors including Microsoft Corp. and Nokia Corp. recently have rallied against NOC-based wireless e-mail systems, boasting that their own offerings don’t rely on NOCs. Further, the patent battle between RIM and patent-holding company NTP Inc. centers on NOC technology.
