Submitted by Research In Motion said Thursday its earnings slipped 4% in its second fiscal quarter as a legal settlement charge offset strong sales of the company’s popular BlackBerry devices. Shares of RIM fell more than 11% in late trading following the report and conference call. The company issued an outlook for the current period that was below Wall Street’s expectations. Analysts also said the strong run-up on the stock price over the last few months made the company vulnerable to high expectations.
Probably obviously, in the U.S.A., Verizon and RIM’s 2 for 1 Blackberry promotion both boosted sales and eroded profits and was partly responsible for their current condition.
They gained working units and there isn’t anything negative about that. The only reason any of these stocks fall on news like that is that there are day traders who want to profit quickly.
Their current condition is the result of many factors but a considerable portion of it has to faulty hardware resulting in high return rates.
Another is the company having to do major (for Rim) acquisitions (Torch Mobile) to compensate for browser shortcomings.
And yet another is the company having to offer buy one get one free promotions to increase share at the expense of profits.
The list goes on and on and on…
Edited 2009-09-25 05:58 UTC