Toronto - Smartphone supplier Research In Motion posted a 36.8 percent increase in second-quarter revenue, but net income fell 4 percent to $475.6 million because of the $112.8 million cost to settle patent litigation, the company reported.
Excluding the settlement cost, net revenues would have risen 18.8 percent to $588.5 million in the 2010 fiscal-year second quarter, which ended Aug. 29, company statistics show.
For the first half, revenues rose 44.2 percent to $6.96 billion, while net income rose 14.4 percent to $1.12 billion.
During the second quarter, the company shipped 8.3 million phones, which was within the lower end of its previous forecast of 8.1 million to 8.7 million but, despite typical summertime lulls, was higher than first-quarter shipments of 7.8 million. The number of net new subscribers to its email redirection service came to 3.8 million in the quarter, expanding the company's subscription base to around 32 million. For the third quarter, the company forecast net subscriber additions of 4 million to 4.3 million.
Second-quarter shipments came in at the lower end of the forecast range, said co-CEO Jim Balsillie, in part because many existing customers upgraded to the new Tour phone.
More than 80 percent of the new subscribers were non-enterprise customers, said Balsillie. Perhaps because of RIM's aggressive pursuit of the consumer market, second-quarter margins fell to 44.1 percent from the year-ago 50.7 percent. First-half margins were 43.8 percent compared to the year-ago 50.7 percent. The company has been discounting prices and offering buy-one, get-one-free promotions to gain consumer-market share.