RIM Q3 net income plunges 71%

BlackBerry smartphones-maker Research In Motion has reported a nearly 71 per cent decline in net income to $265 million for the third quarter ended November 27, 2011, primarily due to the recent service outage that hit users worldwide.

The company had posted a net income of $911 million for the three months ended November 27, 2010, Research In Motion said.

RIM attributed the substantial decline in net income to the widespread internet services outage in October, which hit BlackBerry users across the world, besides the previously announced charge on its unused PlayBook inventory.

"The company experienced a service interruption which resulted in the loss of service revenue and the payment of service credits in the quarter totalling approximately $54 million, related to the interruption in the availability of the company's network," RIM said.

The BlackBerry-maker has also reported lower-than-expected revenues of $5.2 billion in the quarter under review, down 5.45 per cent from the same period last year.

RIM had projected a revenue between $5.3 billion and $5.6 billion for the period.

Looking ahead, the company expects revenues in the fourth quarter of the 2012 fiscal, ending March 3, 2012, to be in the range of $4.6-4.9

billion.

BlackBerry smartphone shipments are expected to amount to between 11 million and 12 million units in the upcoming quarter.

"Despite the challenges faced in the third quarter, the BlackBerry subscriber base grew to almost 75 million customers around the world.

In addition, RIM launched a range of new BlackBerry 7-based smartphones globally and introduced holiday promotions that helped drive growth in the installed base of BlackBerry PlayBook users," RIM Co-CEOs Jim Balsillie and Mike Lazaridis said.

During the quarter, RIM shipped about 14.1 million BlackBerry smartphones and around 150,000 BlackBerry PlayBook tablets.

"We continue to evaluate ways to improve in several areas of the company's operations.

"It may take some time to realise the benefits of these efforts and the platform transition that we are undertaking, but we continue to believe that RIM has the right set of strengths and capabilities to maintain a leading role in the mobile communications industry," Balsillie and Lazaridis added.

The company's cash, cash-equivalents, short-term and long-term investments stood at $1.5 billion as at November 26, 2011, compared to $1.4 billion at the end of the previous quarter.