Patent spat casts shadow over RIM results
Settling patent litigation has hit RIM – maker of the Blackberry push email device – in the pockets. The Canadian company has announced fourth quarter results that disappointed Wall Street with a dent in profits.
For the three months ending 4 March, revenue was $561.2 million – up 39 per cent from the same period last year. Revenue for the full year was $2.07 billion, up 53 per cent from 2005.
According to RIM, the breakdown of revenue was approximately 70 per cent for handhelds, 21 per cent for service, 5 per cent for software and 4 per cent for other revenue. The company said it had shipped 1.1 million handheld devices in the quarter, with 4.0 million shipping across the year.
The bad news, however, were the charges accruing from its long-running legal battle with NTP. Under the terms of the settlement, RIM agreed to pay NTP a total of $612.5 million as a one off payment, and in return received a free hand to continue its business indefinitely. The result was that GAAP net income for the quarter was $18.4 million, or $0.10 earnings per share. Without litigation charges, stated RIM, it would have been $0.65 per share.
RIM shares fell in after-hours trading as results fell below Wall Street expectations. Positive news for RIM is that it claims subscriptions have bounced back since the NTP dispute was resolved, which had been casting a shadow over its service in the US.
‘We have seen a recovery in subscriber additions and business momentum since RIM settled the patent litigation,’ said Dennis Kavelman, Chief Financial Officer at RIM. ‘We have been very encouraged by the increasingly positive indications from customers and partners over the past several weeks, but we also believe it is important to remain prudent in our outlook as we continue to monitor and foster the post-settlement momentum throughout Q1 and Q2.’
You can read the full financial figures on the RIM website.