WATERLOO – Research In Motion (RIM) expects revenue for their third quarter to be lower than forecasted, but still 65% higher than the same quarter last year.
Preliminary results for the BlackBerry maker for the quarter ending November 29 shows that revenue is expected to be in the range of $2.75-$2.78 billion, the company reported. It was previously forecasted to be in the range of $2.95-$3.10 billion. The markets didn’t appear to be surprised Tuesday, with RIM stock up slightly to close at $48.90, but that has been after a number of weeks which have seen the share price take a beating, well off the $120 mark it boasted just three months ago.
As for this quarter, approximately one third of the difference between forecasted and preliminary revenue is expected to be a result of the depreciation of certain foreign currencies relative to the U.S. dollar in the quarter, said the company. The remaining difference is primarily due to lower than estimated unit shipments of existing products, which RIM says is a reflection of general economic weakness in the US, and “shifts” in product launch dates within the quarter.
Net new BlackBerry subscriber accounts for the quarter will be approximately 2.6 million, a 57% increase over the same quarter of last year but also lower than the 2.9 million previously forecasted.
"Initial sales of new products have been very positive and we believe we have the strongest smart phone portfolio in the industry by far, however product launch timing, general economic conditions and foreign exchange volatility have tempered our results in the third quarter," said Jim Balsillie, co-CEO at RIM. "We believe RIM is well positioned to capitalize on the increasing smart phone market opportunity and we remain focused on driving growth in the fourth quarter of fiscal 2009 and beyond."
Subject to final review, gross margin in the quarter is expected to be between 45-46%. The lower than expected gross margin is due primarily to product revenue mix and foreign exchange impacts within the quarter, said the company release.
The company also announced today its intention to offer a take over bid to technology provider Certicom Corporation for $66 million.
