BlackBerry maker RIM has disappointing earnings; stock plummets
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Plagued by stiff competition and a down economy, BlackBerry maker Research in Motion reported disappointing second-quarter earnings, sending its stock plummeting Thursday.
The Canadian tech company reported profits of $419 million, or 80 cents a share, for the three months ended Aug. 27, compared with $796.7 million, or $1.46, in the same period last year. Analysts surveyed by Bloomberg had predicted a more modest drop to 88 cents.
RIM also reported that revenue fell 10% to $4.2 billion, compared with $4.6 billion a year earlier.
Analysts say that the company is continuing to struggle against rivals Google and Apple, which are eating up market share from the once wildly popular maker of smartphones and tablet computers.
‘Credibility sinks further as it’s apparent to us that visibility remains very low and investor risks remain elevated,’ Mike Abramsky, an analyst at RBC Capital Markets, wrote in a research note Thursday.
In a Thursday conference call, RIM co-Chief Executive Jim Balsillie said lower-than-expected sales of older BlackBerry phones were partly to blame for the poor results. He said many people were waiting for the launch of the fresh BlackBerry 7 models, which weren’t available until the end of the quarter.
Analysts say the company’s health depends heavily on the release of new BlackBerry phones that run on RIM’s new QNX operating system. Designed to compete with iPhones and smartphones powered by Android, the company plans to release phones running QNX by early next year.
RIM has already released one gadget running a version of QNX: its PlayBook tablet computer, which has so far been a disappointment. It shipped about 200,000 PlayBooks last quarter, a far cry from the estimated 490,000 units.
RIM shares fell more than 19% to $23.90 in after-hours trading Thursday.