Research in Motion sales take a tumble
BLACKBERRY maker Research In Motion said yesterday its quarterly profit dropped and revenue missed its lowered forecast, forcing the firm to slash its outlook and send its shares sharply lower.
The Canadian company, facing rising competition for its smartphones and under pressure after a botched launch of its PlayBook tablet computer, shipped 13.2m BlackBerrys in the three months to 28 May.
It shipped 500,000 PlayBook tablets in the six weeks after the launch, exceeding the average analyst forecast of 366,000.
But it said the tough conditions that pushed it to warn on profits in April were likely to persist.
“Fiscal 2012 has gotten off to a challenging start. The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter,” co-chief executive Jim Balsillie said in the earnings statement.
RIM said it expects earnings in the current quarter of between 75 cents and $1.05, sharly lower than the already pessimistic average view of $1.40, on revenue between $4.2bn and $4.8bn.
It slashed its earnings outlook for the fiscal year to late March to between $4.25 and $6 a share, from $7.50.
The company made a net profit of $695m, or $1.33 a share, on revenue of $4.9bn. Analysts had expected profit of $1.32 a share on revenue of $5.1bn.
“RIM is in this situation because its phones aren’t competitive and they’re not competitive because they’ve fallen behind on development and product cycle,” said Charter Equity analyst Edward Snyder. “Now they need to accelerate the models to market, but at the same time they are cutting staff.”