City A.M. Reporter
BLACKBERRY maker Research In Motion said yesterday that profits had dropped as it gave an outlook short of analyst forecasts heading into the holiday shopping season.<br /><br />RIM said its quarterly profit dropped 3.5 per cent and that it added only 3.8m new subscribers, at the low end of the forecast it had provided in June.<br />That suggests recession and competition from Palm and Apple, the maker of the popular iPhone, has taken a toll on RIM’s growth.<br /><br />Before the results, investors worried a sluggish economy in the United States and other big markets would cause companies to delay upgrades of the BlackBerry handsets used by their employees.<br /><br />There was also concern that retail consumers – a growing segment of RIM’s customer base – could opt for cheaper and less feature-rich mobile phones to save money.<br /><br />Even so, RIM’s shares have posted impressive gains this year as the economy began to show signs of stability. The stock has more than doubled since March.<br /><br />But after the markets closed on Thursday, the shares tumbled when RIM reported earnings of $475.6m, or 83 cents a share, for its second quarter ended 29 August. That was down from $495.5m a year earlier.<br /><br />Excluding a $112.8m payment to settle patent litigation with Visto, RIM earned $1.03 a share. The result compared with analysts’ average forecast for earnings of $1 a share.<br /><br />Revenue rose to $3.53bn from $2.58bn a year earlier but fell short of the analysts’ consensus forecast of $3.63bn.<br /><br />With the new customers, RIM now has a total of about 32m subscribers and shipped about 8.3m BlackBerry smartphones in the quarter.