Research In Motion Plunges on Drop in Subscriber Base (RIMM)
Despite reporting lighter than expected losses in fiscal third quarter, shares of Blackberry smartphones maker, Research In Motion (NASDAQ: RIMM) plummeted 22.73 percent on Friday, after the company, following closing bell ring on Thursday said that its subscribers base declined in three months period—a first drop in Company’s history. Moreover, investors were also surprised when after the company announced its plans to change its service revenue model—a move which could dent its high margins.
The company said that it subscribers base in the third quarter fell to 79 million from 80 million in the previous quarter.
Now, it will be interesting to see whether the company is able to win back investors’ faith once it launches its much anticipated Blackberry10 or BB10, next month. According to industry analysts, the launch of BB10 operating system is last throw of the dice as the company looks to revamp its flagging smartphone business. The Company has lost considerable smartphones market-share to its American rivals such as Apple’s iphones and Google Andriod operating system/
For the fiscal third quarter, the Canada based company reported that its third quarter revenue plunged 47 percent to $2.7 billion. Net loss on non-adjusted basis or GAAP basis, stood at $ 9 million or 2 cents a share, compared with profit of $265 million or 51 cents a share.
After excluding onetime expenses or earnings based on non-GAAP method, stood at minus $114 million or loss of 22 cents a share. Analysts polled by Thomson Reuters were expecting loss of 35 cents a share.
The company said that it shipped around 6.9 million BlackBerry smartphones and about 255,000 PlayBook tablets during the fiscal third quarter.
For the current quarter, the Company is expecting to report operating loss since it will spend significant amount of money on marketing efforts for the launch of its much-hyped BB10.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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