Research In Motion shares tumbled 9. 4 percent, the biggest drop in almost a year, on signs that subscriber growth for the company's BlackBerry...
Research In Motion shares tumbled 9.4 percent, the biggest drop in almost a year, on signs that subscriber growth for the company’s BlackBerry devices is slowing faster than some analysts predicted.
About 620,000 customers signed up for the BlackBerry e-mail and mobile-phone service in the second quarter, Research In Motion said Wednesday, short of analysts’ estimates of 650,000. A forecast for subscriber additions of as much as 710,000 also missed estimates. Deutsche Bank analyst Brian Modoff cut his rating to “sell.”
Once ubiquitous on Wall Street and in Washington, the BlackBerry is losing customers to Palm and Nokia. Customer additions disappointed investors for a second straight quarter and subscriber growth was 4.7 percent, down from 17 percent a year earlier. Chairman and Co-Chief Executive Officer James Balsillie cited “summer seasonality” for the shortfall.
“Anything that looks like deceleration, that’s a worry,” said Danny Tomka, senior portfolio manager with MFC Global Investment Management in Toronto. The company owns Research In Motion shares as part of its $15 billion under management. “In true growth stories, seasonality doesn’t make a difference.”
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Shares of the Waterloo, Ontario-based company fell $7.25 to $70 yesterday, the biggest decline since November last year. The stock is down 15 percent this year.
BlackBerry gadgets and software are Research In Motion’s only products. The company has 3.65 million total subscribers.