RIM Sent Reeling
RIM plans to maintain the accounting treatment for the settlement that it had outlined previously, said Kavelman on the call. The company expensed the bulk of the proposed $450 million settlement amount in its fourth quarter last year.
Since an unfavorable appeals court ruling in December, the NTP dispute has weighed heavily on RIM's stock. The case could potentially result in RIM being barred from selling its BlackBerry products in the U.S., by far the company's biggest market.
But even though the company didn't do much to assure investors on the NTP front, it did offer some positive news.
Subscription growth, for instance, continued apace in the just-completed quarter. The company added 592,000 subscribers to its BlackBerry service -- a 24% jump, sequentially -- and crossed the 3 million subscriber point for the first time. The company expects continued strong growth in the second quarter, forecasting that it will add 620,000 to 650,000 new subscribers in the quarter, which would represent a 20% to 21% quarterly increase.But that too may have spooked investors. Even at the top of that range, sequentially subscriber growth would be the slowest it's been in eight quarters, potentially indicating a slowing of the company's overall growth rate. Kavelman, however, chalked up the projections to expected seasonality of its business, noting that corporate demand tends to soften in the summer. And with consumer purchases becoming more important to RIM, that seasonal fluctuation in the company's business could increase. RIM expects to post a higher subscriber growth rate in the third quarter, Kavelman said. Thanks in part to that expected surge, the company offered third-quarter guidance that was above the Street's outlook. RIM expects to post a profit of 62 cents to 68 cents a share in the third quarter on sales ranging from $525 million to $550 million.
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