BlackBerry Maker's Quarterly Report Displeases Wall Street

During its most recent financial quarter, Research In Motion (RIM) experienced a 37% increase in revenue, but investors have begun dumping the stock because they expected better -- and the situation wasn't helped by the company's warning that some devices will launch later than the company had hoped.

The maker of the BlackBerry line took in $3.53 billion in the June-Aug. period. While an increase, investors have come to expect RIM to grow its revenue dramatically year-over-year.

The company's net income also had an annual decline. Income for the quarter, on a GAAP basis, was $475.6 million, or $0.83 per share, compared with GAAP net income of $495.5 million, or $0.86 per share diluted, in the same quarter last year. 

RIM's shares closed yesterday, before this announcement, at $83.06. This morning they opened at $70.46. 

Revenue and Units
Much of this company's revenue for the quarter came from shipping  8.3 million smartphones.  The breakdown was approximately 81% for devices, 14% for service, 2% for software, and 3% for other revenue.

There were about 3.8 million new BlackBerry new users added in the quarter, bringing the total subscriber base was approximately 32 million. 

Clouds Ahead?
RIM executives didn't paint a particularly rosy picture for the current quarter.

Revenue for the Sept.-Nov. period is expected to be between $3.60 and $3.85 billion.  Net subscriber additions are predicted to be in the range of 4.0-4.3 million, with 9.3 million to 9.9 million smartphones shipped.  Earnings per share are expected to be around $1.00-$1.08 per share.

While an increase over the current quarter, summer is one of RIM's slowest, while fall should be its busiest. The revenue prediction is below analysts' predictions.

In addition, the company isn't going to refresh its product line until later in the quarter, reducing the average selling prices (ASP) for its products. Generally speaking new products sell for more than older ones.

RIM co-CEO Jim Balsillie said:

The scheduling of new products for later in the quarter and the risks associated with getting new products out in time is also contributing to the lower ASP as most of these products have a higher average selling price but are not expected to be shipping for the full quarter.

Source: RIM