RIM Reports Quarterly Earnings... Stock Plummets

By James Falconer on 26 Sep 2008 10:23 am EDT
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RIM Stock PlummetsYesterday, Research in Motion gave investors a bit of a shock when they reported their quarterly earnings. Margins are shrinking and earnings won't be up to analysts' forecasts. This is mostly due to RIM spending loads of cash on new and improved devices and rollouts (Bold, Pearl Flip, Storm). Shortly after the quarterly earnings were reported, the stock plummeted more than 19%.... and as I write this post this morning, I see that the stock has continued to fall... Ouch.

Even though the stock took a bit of a dive (ok, 'a bit of a dive' might be an understatement), RIM also noted that sales increased 88% and profit rose 72% in the quarter ending August 30th. However margins have narrowed from 54% to 47%... and earnings will be around 89¢ to 97¢ per share. Subscriptions did not decline as a result of the huge hits in the financial markets (we all know bankers and traders love their Berries)... In fact, subscriptions went up by 2.6 million and RIM also sold 6.1 million units as consumers continue to ditch conventional cellphones for more powerful smartphone devices such as the BlackBerry. At the surface it seems not that bad, but combine a weak first quarter with a weak second quarter and Q3 projections that have been scaled back a bit and it seems Wall Street has lost some faith in what was one of Canada's biggest companies (in terms of market cap). Let's hope the price comes back up sooner, rather than later... especially if you were holding any of the stock!

Things are shaping up for a very interesting Q3... Wouldn't you say?

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Topics: News & Rumors

James Falconer James Falconer "Community Manager, Mobile Nations" 354 (articles) 723 (forum posts)
2 comments

Anonymous

I don't really care about RIM earnings. The company earns too much money. I am not going to cry over corporate downfall in wall street or baystreet