Research In Motion (RIMM) Doesn't Meet 2nd Quarter Expectations
Canadian-based tech company Research In Motion (RIMM) posted below-expectation second quarter earnings today, which caused its stock to plummet. The company's shares dropped over 3% today alone, finishing at $83.06 per share. In after hours, RIMM's stock fell another 8% to $73.83.
RIMM's net income fell from $495.5 million in the second quarter of last year to $475.6 million in the same quarter this year. Moreover, RIMM's second quarter sales of $3.53 billion were below the analyst estimate of $3.62 billion.
To date, RIMM seemed to have been unaffected by the global economic crisis and the ever-growing iPhone popularity. But, some are saying expectations for RIMM profit are unrealistically high. So, the company is adjusting its third quarter sales forecast for a more realistic outlook.
Revenue for the second quarter of fiscal 2010 was $3.53 billion, up 3% from $3.42 billion in the previous quarter and 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.
"We are pleased to report a strong second quarter with excellent financial performance, successful product launches and accelerating growth in international markets and new market segments," said Jim Balsillie, Co-CEO at Research In Motion.
"RIM is entering the second half of the fiscal year and approaching the holiday buying season with an impressive product portfolio, continuing business momentum and strong marketing support from our partners around the world."
But, this does not mean that RIMM is doing poorly. Perhaps, it is not meeting the expectations of analysts, but it is improving even compared to the first quarter of 2010 fiscal year -- second quarter sales were 3% higher than those from first quarter.
RIM put its sales forecast for the quarter ending in November between $3.6 billion and $3.85 billion. The midpoint of that range is $3.72 billion, well below the $3.9 billion target analysts had for RIM.