RIM Earnings Take a Dip in 3Q, 4Q Forecast Below Expectations

By Ashok Bindra December 16, 2011

With tough competition from Apple’s iPhones and Google Android based smartphones, Canada’s BlackBerry maker Research In Motion (RIM) Ltd. has been losing market share this year to the emerging competition. RIM’s latest earning report is a clear indicator of this trend. The BlackBerry maker reported a sharp dip in its third quarter earnings as compared to the same quarter in 2010. In addition, the forecast for the fiscal fourth quarter is also bleak. The Wall Street Journal’s MarketWatch reports that RIM’s forecast for the current quarter was well below Wall Street's expectations.

RIM’s revenue for the third quarter, which ended November 26, was $5.2 billion, down six percent from $5.5 billion in the same quarter last year. However, it is up 24 percent from the previous quarter, which was $4.2 billion. The revenue breakdown for 3Q shows that about 79 percent of the earnings was generated from hardware and 19 percent came from service. The other two percent was contributed by software and other services. During this quarter, RIM sold over 14 million BlackBerry smartphones and about 150,000 BlackBerry PlayBook tablets.

The company’s GAAP net income for the 3Q was $265 million, or 51 cents per share diluted, compared to net income of $911 million, or 1.74 cents per share diluted, for the same quarter in 2010. Likewise, the adjusted net income for the third quarter was $667 million, or $1.27 per share diluted, for the same quarter.

Earnings for the fourth fiscal quarter, ending March 3, 2012 are expected to be in the range of 80-90 cents per share. However, reports indicate that the analysts were predicting $1.18 per share. Meanwhile, the revenue for 4Q is expected to be in the range of $4.6 billion and $4.9 billion, with smartphone shipments in the range of 11-12 million units for the quarter. This is much below analyst expectation of $5.12 billion revenue with 13.1 million units shipped for 4Q, according to MarketWatch.

Meanwhile, Bloomberg BusinessWeek reports that RIM has delayed the release of new generation of BlackBerrys to 2012. RIM is hoping that these new generation smartphones will drive the company back into the game. But, analysts fear that delaying the launch of new generation devices will only hurt the company.


Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Mist Applies AI to Improve Wi-Fi

By: Paula Bernier    11/9/2017

Mist has created an AI-driven wireless platform that puts the user and his or mobile device at the heart of the wireless network. Combining machine le…

Read More

International Tech Innovation Growing, Says Consumer Technology Association

By: Doug Mohney    11/8/2017

The Consumer Technology Association (CTA) is best known for the world's largest trade event, but the organization's reach is growing far beyond the CE…

Read More

Broadcom Makes Unsolicited $130B Bid for Qualcomm

By: Paula Bernier    11/6/2017

In what could result in the biggest tech deal in history, semiconductor company Broadcom has made an offer to buy Qualcomm for a whopping $130 billion…

Read More

How Google's 'Moonshot' Could Benefit Industrial Markets

By: Kayla Matthews    10/30/2017

The term "moonshot" encapsulates the spirit of technological achievement: an accomplishment so ambitious, so improbable, that it's equivalent to sendi…

Read More

After Cisco/Broadsoft, Who's Next for M&A?

By: Doug Mohney    10/27/2017

Cisco's trail of acquisition tears over the decades includes the Flip video camera, Cerent, Scientific Atlantic, Linksys, and a couple of others. The …

Read More