BlackBerry maker Research in Motion has disappointing earnings report, stock plummets
Hurt by increased competition and a down economy, BlackBerry maker Research in Motion reported disappointing first-quarter earnings and lowered its outlook for the year, sending its shares plummeting Friday.
The Canadian smartphone maker also plans to slash an unspecified number of jobs from its workforce as it continues to struggle with production delays and decreased demand due to a still-sluggish economy, the company said in a Thursday statement.
The company reported profits of $695 million, or $1.33 per share for the three months ended May 28, compared with $7.69, or $1.38 per share, in the same period last year. For the current quarter, it forecasted earnings of 75 cents to $1.05 per share, falling below analyst expectations of $1.36 per share.
The smartphone and tablet maker also sharply lowered its annual earnings outlook to $5.25 to $6 per share, down from an April forecast of $7.50 per share.
"The slowdown we saw in the first quarter is continuing into" the next three months, Jim Balsillie, RIM's co-chief executive, said in the statement. "Delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter."
Anil Doradla, a technology analyst with investment firm William Blair & Co. in Chicago, said that RIM's BlackBerry is continuing to lose market share to the iPhone and smartphones running on Google's Android operating system.
"As a result, RIM did not have a smartphone in the top three positions at any of the four major North American carriers," Doradla wrote in a Thursday note to investors. "Additionally, during the quarter RIM saw significant price cuts at AT&T and Sprint."
RIM said it would focus on "taking out redundancies" in the current quarter, including cutting unnecessary jobs.
Earlier on Thursday, the company announced that Don Morrison, its chief operating officer, is going on medical leave.
RIM shares fell nearly 15% to $30.13 in after-hours trading Thursday.
Photo: Michael Lazaridis, president, co-chief executive officer and co-founder of Research In Motion, addresses the audience at the BlackBerry World conference in Orlando, Fla., on May 3, 2011. Credit: Phelan M. Ebenhack / Bloomberg