Research In Motion Lowers Q3 Revenue Forecasts

Canada's Research In Motion has lowered its expectation for its 3rd quarter revenues to be in the range of $2.75-$2.78 billion, compared to earlier  forecasted revenue range of $2.95-$3.10 billion. The company noted that this is still about 65% higher than revenue in the same quarter of last year.

Approximately one third of the difference between forecasted and preliminary revenue is expected to be a result of the depreciation of certain foreign currencies relative to the U.S. dollar in the quarter. The remaining difference is primarily due to lower than estimated unit shipments of existing products, which RIM believes is a reflection of general economic weakness in the United States and shifts in product launch dates within the quarter.

Subject to final review, gross margin in the quarter is expected to be between 45-46%. The lower than expected gross margin is due primarily to product revenue mix and foreign exchange impacts within the quarter.

RIM expects the number of net new BlackBerry subscriber accounts added in the quarter to be approximately 2.6 million, which is lower than the 2.9 million previously forecasted but reflects a 57% increase over the same quarter of last year.

Despite the impact of later product launch dates and general economic weakness in the United States, customer response to the new BlackBerry products launched this quarter has been exceptional and RIM has experienced particularly strong momentum in recent weeks. Daily net subscriber account additions reached a record level on the day the BlackBerry Storm launched in the United States and RIM achieved a record number of weekly net subscriber account additions during the last week of the third quarter. The strong demand for new products has continued into Q4 and RIM is working closely with its partners to deliver sufficient product to take advantage of the growth opportunity in Q4 and beyond.

"Initial sales of new products have been very positive and we believe we have the strongest smartphone portfolio in the industry by far, however product launch timing, general economic conditions and foreign exchange volatility have tempered our results in the third quarter," said Jim Balsillie, Co-CEO at RIM. "We believe RIM is well positioned to capitalize on the increasing smartphone market opportunity and we remain focused on driving growth in the fourth quarter of fiscal 2009 and beyond."

Posted to the site on 3rd December 2008