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RIM earnings fall as it trims its forecasts

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&rsquo;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 &ndash; a growing segment of RIM&rsquo;s customer base &ndash; could opt for cheaper and less feature-rich mobile phones to save money.<br /><br />Even so, RIM&rsquo;s shares have posted impressive gains this year as the economy began to show signs of stability. The stock has more than doubled since&nbsp; 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&rsquo; 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&rsquo; 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.