Research In Motion Limited today announced preliminary unaudited operating results for the fourth quarter ending March 4, 2006, that are below the previously expected ranges, primarily due to the effects of the uncertainty caused by the NTP litigation on RIM’s business in the quarter. All numbers are in US Dollars and US GAAP unless otherwise specified.
Net subscriber account additions for the fourth quarter are expected to be in the range of 620,000-630,000 which is below the 700,000-750,000 range provided in December. The main reason for the decrease is that uncertainty surrounding the NTP litigation caused corporate and retail customers in the United States to defer BlackBerry purchase commitments. While some uncertainty was anticipated in December, the overall impact was greater than previously anticipated.
Revenue for the fourth quarter is expected to be flat with the third quarter in the range of $550-560 million which is lower than the range of $590-620 million provided in December. This compares with revenue of $404.8 million in the same quarter last year. Customer uncertainty surrounding the NTP litigation mainly impacted software and hardware revenue. Service revenue in Q4 was slightly lower than expected due to the lower subscriber account additions in the quarter. The lower overall revenue, and substantially lower software revenue than expected, led to lower gross profit and earnings in the quarter.
Non-GAAP earnings per share, which exclude NTP litigation related provisions, are expected to be in the range of 64-66 cents, which is below the range of 76-81 cents provided in December. These are preliminary unaudited non-GAAP operating results that exclude the effect of the NTP settlement announced earlier today. These preliminary, non-GAAP operating results do not have any standardized meaning prescribed by GAAP and may not to be comparable to similar metrics presented by other companies.
“As we put this lengthy and complicated litigation behind us, we extend our sincere gratitude to all of our customers and supporters for their patience and loyalty,” said Jim Balsillie, Chairman and Co-CEO at RIM. “We are extremely confident and excited with our current line-up of BlackBerry products and services and we look forward to extending our technology and market leadership into the future.”
RIM will provide complete Q4 results and a discussion of the outlook for the first quarter of fiscal 2007 on April 6, 2006.
RIM will hold a brief conference call and webcast at 5:30 pm today to discuss the preliminary results and the settlement of the NTP litigation. The conference call and live webcast can be accessed by dialing 416-640-1907 or 800-814-4861 or by logging on at www.rim.com/investors/events/index.shtml. A replay of the conference call will also be available at approximately 7 pm by dialing 416-640-1917 and entering passcode 21180183#. This replay will be available until midnight EST March 18th, 2006.