Shares in Research In Motion (RIM) were down more than 16 percent at one point today after the company said its quarterly earnings would come in at the low end of its prior forecast, even though it saw strong subscriber growth.
RIM now expects fourth-quarter subscriber additions to be more than 20 percent higher than the 2.9 million it had previously forecast. The company attributed the outperformance to new products, lowered channel inventory and strong post-holiday sales.
RIM had record levels of subscriber additions in December and continued to see strong levels after the holiday season. “RIM achieved a very strong start to the holiday buying season and the momentum carried on stronger than expected during the past seven weeks despite a seasonally slower timeframe and the challenging economic environment,” said CEO Jim Balsillie in a statement.
However, RIM expects revenue to be at or near the midpoint of its previously predicted range, with gross margin and earnings per share coming in at the low end of the guidance range.
UBS analyst Maynard Um said that while strong net addition guidance may be better than anticipated, the revenue, gross margin and earnings per share estimates were below expectations, raising questions about pricing pressure. The research firm previously noted that returns of the higher-end Storm may be turning into sales for the older Curve.
RIM expects to report fourth-quarter results on April 2.