This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

RIM Can't Deliver

Updated from Sept. 28

Research In Motion (RIMM) got into a battle of perceptions with investors after the bell Wednesday that in the short term has left the company's stock on the losing side.

The clash involved the BlackBerry maker's second-quarter earnings report. In making the report, the company seemed to have the high ground, posting 58% annual revenue growth and forecasting better-than-expected sales in the third quarter.

"We are very pleased with the progress achieved by RIM and its partners over the summer, and we are particularly energized by our prospects for the second half of the fiscal year," Jim Balsillie, RIM's co-CEO, said in a statement.

But investors seemed to see things a bit differently, and they had some ammunition on their side. At least nominally, the company missed its own earnings guidance and appeared to fall short of analysts' estimates.

Moreover, RIM's subscriber growth in the quarter came in at the low end of its guidance, and its expenses were up sharply.

The end result: RIM shares slumped in early Thursday trading, off $4.75, or 6.2%, to $72.50.

In the quarter ended Aug. 27, RIM earned $111.1 million, or 56 cents a share. That was up from the year-ago period, when the company earned $70.6 million, or 36 cents a share. But the company's profit was down from the previous quarter, when it earned $132.5 million, or 67 cents a share.

The sequential earnings decline came despite the fact that sales were up 8% from the first quarter to the second quarter. RIM rang up $490.1 million in the just-completed period, compared with $453.9 million in the first quarter and $310.2 million a year earlier.

At least on the surface, the company's bottom line in the second quarter compared poorly with expectations. On average, analysts polled by Thomson First Call were expecting the company to earn 61 cents a share -- or 59 cents on a GAAP basis -- in the quarter on sales of $488.7 million.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $124.75 -1.13%
FB $80.78 -1.86%
GOOG $524.05 -1.83%
TSLA $206.79 0.04%
YHOO $44.45 -2.91%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs