Bono couldn’t save BlackBerry. Research in Motion reported a decline in quarterly profits Thursday, causing the company’s stock to plunge in Friday trading. Although revenues were up, the BlackBerry maker’s profits are shrinking.
RIM’s revenue for the second quarter of fiscal 2010 was $3.53 billion, up three percent from $3.42 billion in the previous quarter and up 37 percent from $2.58 billion in the same quarter last year. Most of RIM’s revenue, 81 percent, came from devices. Another 14 percent came from services, and two percent came from software.
RIM shipped about 8.3 million devices in the quarter and gained about 3.8 million new BlackBerry subscriber accounts. At the end of the quarter, RIM counted about 32 million BlackBerry subscribers.
“We are pleased to report a strong second quarter with excellent financial performance, successful product launches, and accelerating growth in international markets and new market segments,” said Jim Balsillie, RIM’s co-CEO. “RIM is entering the second half of the fiscal year and approaching the holiday buying season with an impressive product portfolio, continuing business momentum, and strong marketing support from our partners around the world.”
RIM’s Challenge
Balsillie sounds optimistic, but the markets didn’t respond well to RIM’s earnings or its outlook. RIM’s earnings declined four percent in the second quarter, thanks, in part, to patent-settlement charges. And the company projected third-quarter revenues of between $3.6 billion and $3.85 billion, with anticipated earnings of $1 to $1.08 per share. RIM also said the selling price for BlackBerrys will drop to $320 in the third quarter, about $25 less than the previous quarter.
Michael Gartenberg, a vice president at Interpret, said part of RIM’s challenge is increased competition. Other companies, including Apple, have learned to emulate RIM’s signature trick — push e-mail. Perhaps more important, he noted, is the consumer trend toward using smartphones for more…